Bitcoin has kicked off July with renewed strength, rebounding sharply from recent lows and reinforcing the month’s reputation as one of the strongest periods for the asset during bear markets.
Despite the encouraging price action, market analysts caution that the broader trend remains bearish. Until demand strengthens significantly, the current rally is more likely to be viewed as a recovery within a bear market rather than the beginning of a lasting uptrend.
July Seasonality Supports Bitcoin’s Rebound
According to CryptoQuant’s latest weekly report, Bitcoin’s recovery has been fueled by the historically favorable performance the asset tends to experience in July, combined with signs of improving market demand.
The report notes that July has consistently delivered positive returns for Bitcoin over the past decade, particularly during bearish market cycles. In 2018 and 2022, for example, the cryptocurrency finished the month with gains of 20 percent and 17 percent, respectively.
This month has followed a similar pattern so far. Bitcoin has climbed roughly 11 percent from its recent low of $57,700 to trade above the important $64,000 level, a key area of technical support and resistance.
Because Bitcoin entered July after reaching a fresh bear market low, CryptoQuant believes seasonal trends could continue supporting further upside before the month concludes.
Demand Is Showing Early Signs of Recovery
Beyond favorable seasonality, analysts also point to improving demand as another encouraging development.
CryptoQuant reported that total Bitcoin demand has recovered significantly after experiencing its sharpest contraction since 2022. The firm’s 30 day demand indicator fell to negative 650,000 BTC in early June as Bitcoin dropped toward $58,000, but has since rebounded to near neutral levels.
The report also highlighted improving activity in the futures market, where speculative demand has turned slightly positive, while spot market demand is contracting at its slowest pace since mid May.
According to the analysts, a return to positive territory would provide stronger confirmation that demand is beginning to recover.
Market Sentiment Remains Bearish
Demand from US investors has also improved, reflected by the recovery in the Coinbase Premium Index. The indicator has risen from deeply negative levels to around negative 0.062, suggesting that selling pressure on US exchanges is easing and institutional interest is becoming more stable.
Even with these positive developments, CryptoQuant stresses that overall market conditions remain firmly bearish.
The firm’s Bull Score Index is currently sitting near 20, well within bearish territory. While Bitcoin appears undervalued in the short term and may continue recovering, analysts believe much stronger demand will be required before a sustainable bull market can begin.
According to CryptoQuant, the Bull Score Index would need to rise above 60 to support a lasting upward trend. Until then, the current price rebound should be viewed as a bear market recovery rather than a confirmed reversal of the broader trend.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
