Bitcoin’s July Rally May Be Running on Fumes, Data Suggests

Bitcoin held onto gains above $60,000 through the first days of July, but momentum appears to be fading. The price retreated more than 2% after retesting the 50% RSI level, a key threshold where a push above typically signals continued upside and a pullback suggests another reversal could follow.

Liquidity Keeps Drying Up

CryptoQuant pointed out that stablecoin market caps, including USDT and USDC, shrank in June as more liquidity left crypto than flowed back in. That trend runs counter to what typically happens before a major rally, when stablecoin supply usually grows. Weak spot buying alongside heavier derivatives positioning further suggests the recent bounce lacks strong underlying support.

Whale Activity Points to Profit-Taking

The Bitcoin exchange whale ratio, a measure of how much of exchange inflows come from large holders, jumped from 0.49 at the end of June to 0.63 recently. A rising ratio suggests whales are taking profits during the recovery rather than accumulating, which could add selling pressure and cap further gains.

One Potential Offset: Fed Liquidity

Despite the cautious signals, some analysts note the Federal Reserve may be preparing to inject additional liquidity into markets, which could flow into crypto and help cushion against further declines.