Crypto Markets Brace for July Lull Despite Key Events

July is anticipated to be a historically low-volume month for cryptocurrency markets, despite the intense political and economic agenda. According to Vetle Lunde, Head of Research at K33 Research, this summer could mirror the quiet periods of previous years. Lunde highlighted that July is a volatile period in the US, often referred to as the “Trump trade,” with significant agenda items such as the budget bill, resumption of tariff decisions, and crypto-related executive order calendars. However, past Julys have also been marked by low-volume trading periods, suggesting that the market may enter a state of dormancy during the summer months.

Lunde noted that despite significant events such as the bankruptcy of Three Arrows Capital and Celsius in July 2022, and other major political and economic developments, the second lowest monthly trading volume in the last four years was observed in July. This indicates that the market tends to "sleep" during the summer, with minimal price movements and low trading activity. The upcoming agenda for July includes key events such as the budget bill, the end of the 90-day tariff moratorium, and the final assessment and proposal submission date for the US Strategic Bitcoin Reserve (SBR). These events could potentially impact the market, but the overall sentiment remains cautious, with investors adopting a wait-and-see approach.

Lunde warned investors that an announcement regarding the SBR could be made at any time, increasing uncertainty in the market. Despite Bitcoin being only 3% off its all-time high, funding rates, leveraged ETF exposures, trading volumes, and options data reflect a cautious market stance. This reduces the risk of sudden liquidations in potential uptrends, according to Lunde. He advised that while it may seem lazy to assume that this summer will be as quiet as previous years, the best strategy is to remain patient and hold onto existing positions. The overall sentiment remains cautious, with investors and traders adopting a wait-and-see approach. The market's behavior in July will be closely monitored to gauge the potential for a breakout or further consolidation.