Bitcoin holds July gain as ‘forced-selling fuel was already spent,’ analysts say

Bitcoin BTC$62,885.66 is ending July on firmer footing than many investors might have expected.

Yes, it slipped below $63,000 on Friday, down about 3% on the day. But zoom out, and the largest cryptocurrency is still on track to finish the month up roughly 7.5% — a respectable showing considering the list of headwinds markets have had to absorb.

The past few weeks have brought rising expectations that the Fed could hike rates this year, climbing bond yield, a sharp unwind in the AI trade and — most recently — a high-profile security incident involving Coldcard, one of bitcoin’s best-known hardware wallets.

Yet bitcoin has avoided a deeper pullback that many feared and consolidated above its bear market lows even as risk appetite cooled in other pockets of the market.

Part of that resilience comes down to positioning, Bitfinex analysts said.

Crypto entered the Fed meeting with far less leverage than equities after derivatives traders were largely flushed out during the selloff late June that brought BTC below $58,000 on July 1, the analysts noted.

Since then, average daily liquidations have remained well below this year’s typical $400 million-$500 million range, suggesting there has been little forced selling despite the macro shock, according to Bitfinex.

“Crypto fell less than levered equity themes because the forced-selling fuel was already spent,” the analysts wrote.

Separately, the market is also digesting the fallout from a major exploit involving Coldcard, which resulted in at least $38 million worth of bitcoin being stolen.

The incident hasn’t materially affected price action, but it marked another blowback as digital asset-related exploits have surged and reignited debate around risks of self-custody, one of crypto’s fundamental promises.

“The proceeds haven’t yet been liquidated, but the knock-on effect of this and the likelihood of liquidation will weigh on bitcoin pricing in the near term,” said Paul Howard, director at trading firm Wincent. More broadly, he said, the exploit highlights the operational risks that continue to accompany self-custody.

Read more: Coldcard’s $38 million (so far) exploit shakes faith in self-custody, may push investors to ETFs

Looking ahead, macro uncertainty remains the dominant theme.

Jeff Anderson, managing partner at STS Digital, said markets may be entering “a new volatility regime” as investors swing between expectations for rate cuts, pauses and hikes. That uncertainty, he said, is likely to keep pressure on high-beta assets such as bitcoin until the economic outlook becomes clearer.

Bitfinex analysts expect investors to remain defensive heading into next week’s U.S. jobs report, the next major macro catalyst after the Fed meeting. Rather than worrying about another wave of forced liquidations, they say the bigger question is whether spot bitcoin ETF inflows return once markets have a clearer read on the Fed’s path.

“We believe positioning stays defensive while hike risk is live,” the analysts wrote. “The institutional bid being aggressive or price-agnostic is the signal for traders which has not fired yet.”

“Base case is a choppy August with bitcoin range-bound unless real yields fall or ETF flows turn consistently positive again,” said Lacie Zhang, research analyst at Bitget Wallet. “The market can absorb a neutral Fed, but not a stronger dollar, higher real yields, and weak ETF demand all at once.”