Bitcoin traders bet on a bullish July: BTC ETF records $124 million inflow

Since April, the price of Bitcoin has fluctuated between 59,000 and 74,000, but historical trends show that July could be a bullish situation. Seasonal cycles, such as profit-taking during the tax season in April and May, and increased demand in December, can affect cryptocurrency prices, leading to predictable changes.

After months of declines and volatility, Bitcoin (BTC) bulls may have reason to be cheerful in the coming weeks, as a possible seasonal cycle will drive the price of the largest cryptocurrency higher.

 Since April, BTC has traded between 59,000 and 74,000, impacted by billions of dollars of selling pressure, upcoming selling pressure, outflows from exchange-traded funds (ETFs), and negative sentiment among retail traders.

However, the historically bullish nature of July could quickly change that. On the first day of the month, US-listed ETFs recorded inflows of nearly $130m - the highest level since early June - after outflows of more than $900m the previous month.

"Bitcoin posted a median return of 9.6 percent in July and typically rallies strongly after negative Junes (-9.85 percent)," Singapore-based QCP Capital highlighted in a Telegram broadcast on Monday. "Our options trading desk also saw month-to-month flow last Friday, possibly anticipating the launch of ETH spot ETFs. Many signs point to a bullish July."

Over the past decade, Bitcoin has returned an average of more than 11% in July, with positive returns in 10 out of 7 months. Crypto fund Matrixport noted in a 2023 report that July returns from 2019 to 2022 were 27 percent, 20 percent, and 24 percent, respectively.

Seasonality is the tendency of assets to experience routine and predictable changes that repeat from year to year. Although seemingly random, possible causes include a pullback caused by profit-taking during the April and May tax seasons, as well as a generally bullish "Santa Claus" rally in December, which signals increased demand.

Overall, this seasonal variation makes Bitcoin's performance in July historically positive to expect. If this trend continues, investors could see a bullish rebound in the BTC market over the next few weeks, which is certainly good news for investors who have experienced the price volatility of the previous months.