- Crypto market capitalization dipped 14% in June, plummeting from an early month high of $2.78 trillion to approximately $2.4 trillion at the end of the month.
- Historically, June has shown a bearish pattern, but July has often seen a market recovery.
- On June 30, analyst Murad Mahmudov shared a chart on X indicating past market bottoms in June followed by bullish recoveries in July dating back to 2018.
June’s downturn was severe, but historical trends point towards a potentially bullish July in the crypto market.
Potential Big Bitcoin Gains in July
In June 2023, the market cap fell to just over $1 trillion. Subsequently, the markets recovered in July, with gains exceeding 22% by mid-month.
Despite this, the market remained range-bound until the end of October, and some analysts expect similar trends this year.
“Bitcoin is poised to challenge the June downtrend for a breakout,” commented analyst ‘Rekt Capital’ on June 30.
They stated that BTC must close the day above the June downtrend to initiate a breakout.
Bitcoin is forming a higher low and demonstrating favorable conditions to establish a cluster of price action at this range low of $60,600. The analyst further noted:
“This cluster might develop over the entire month of July but primarily aims to propel Bitcoin back to the range high at $71,500.”
Over the weekend, BTC prices surged nearly 4%, reaching an intraday high of $63,700 during Monday’s Asian trading session.
Additionally, it appears to have retested the former significant resistance now serving as new support on a quarterly timeframe, observed ‘Rekt Capital.’
However, the impending Mt. Gox repayments, estimated at more than $8 billion in BTC, set to commence in early July, could negatively impact the asset’s performance.
M2 Money Supply Expansion
There are indications that the M2 Money Supply, previously linked to crypto market cycles, is expanding once again. This is favorable news for crypto as an increase in the money supply introduces more liquidity, bolstering investment into higher-risk assets.
M2 is a measure of the money supply that includes cash, checking deposits, and easily convertible capital. An increase in M2 typically signals central bank money printing, leading to concerns of fiat devaluation, which in turn drives investments in assets considered stores of value.
ATTENTION: M2 money supply is now expanding pic.twitter.com/5PQJbCMDms
— Game of Trades (@GameofTrades_) June 30, 2024
Conclusion
In summary, the crypto market experienced a notable downturn in June. But historical patterns suggest July could usher in a recovery, particularly for Bitcoin which is showing signs of forming a critical price action cluster. The expanding M2 Money Supply further augments positive prospects for the market as increased liquidity typically benefits high-risk assets like cryptocurrencies. Investors should stay alert to upcoming market events such as the Mt. Gox repayments while considering the broader economic indicators.
