Bitcoin’s gloom may last throughout July, but investors are still optimistic about the cryptocurrency in the second half of the year. The cryptocurrency has yet to break out of the narrow range it has been stuck in – between $60,000 and $70,000 – since March. This week, it dropped to the lower end of that range and is now on track to end June down 10%, according to Coin Metrics. That would make this the worst month since April and the second most negative month in three. July is typically a strong month for bitcoin, which has finished higher for the month in seven of the last 11 years, according to CoinGlass. At $61,000, bitcoin has key support at the $67,000 level, chart analysts say, although a breach below that could be “damaging.” Investors are worried about the cryptocurrency falling due to oversupply in July. “The Bitcoin halving was a known positive supply event for the market this year – we have less bitcoin being produced,” said Zach Pandl, managing director of research at Grayscale Investments. “There are always other known potential sources of government bitcoin supply, for example, but it is always uncertain when this will come to market. To some extent, the supply being liquidated by things like government agencies is partially negating the positive effects in the short term. “This week, the crypto market was surprised when the US and German governments sent large amounts of previously seized bitcoins to exchanges, according to CryptoQuant. Additionally, the administrator of the now-defunct exchange Mt. Gox announced that it will begin paying creditors – 142,000 bitcoins worth $9 billion at today’s prices – starting in July. 10 years for a resolution with the exchange.” This fear is justified given the recent behavior of Gemini’s creditors, who have reportedly liquidated some of the crypto assets received in recent weeks; in particular, nearly $2 billion in crypto assets were returned to 232,000 retail customers by failed crypto lender Genesis and crypto exchange “Gemini,” JPMorgan’s Nikolaos Panigirtzoglou said in a note this week. “A similar downside risk looms in July with Mt. Gox creditors,” he added. “Assuming that the majority of settlements by [them] Bitcoin is still solidly in a bull market, however, despite the recent and potentially short-term sluggishness, and market participants expect the cryptocurrency to retest its March all-time high of around $73,000 by the end of the year. If the market gets another bearish CPI print, a Federal Reserve rate cut at the central bank’s September meeting would become the base case for many macro investors, he said. Bitcoin, along with other risk assets, tends to rally on expectations of rate cuts. The next CPI analysis is scheduled for July 11. Messaging from the U.S. presidential election campaign regarding the U.S. dollar — which moves inversely to bitcoin — could also catalyze the next leg higher, Pandl said. “We don’t know what candidate Trump’s views are on the U.S. dollar,” Pandl said. “Trump has expressed a view that he would like to see smaller U.S. trade deficits, but so far, he has mostly focused on the need for tariffs.” “It’s possible that during the campaign, Trump could introduce the idea that we need a weaker dollar,” he added. “Those two things in combination would be positive for bitcoin: Fed rate cuts and one of the two presidential candidates talking about dollar weakness.” Marion Laboure, a senior strategist at Deutsche Bank Research, said the growing demand for cryptocurrency ETFs will help keep bitcoin’s price “elevated” in the coming months. Initial filings, known as 19b-4s, for ether ETFs were approved in May, and the funds themselves are in the process of getting S-1 registration approvals — which are expected to happen in the coming weeks. This week, VanEck and ARK 21Shares also filed for what would be the first Solana spot ETFs. “There’s a lot of uncertainty in the market, but I’m pretty optimistic,” she said. “I wouldn’t be surprised if we see more ETFs approved as well. If we have a clearer institutional framework, we’ll have more ETFs. … We’re moving toward more democratization, more institutionalization of ETFs.” —CNBC’s Michael Bloom contributed reporting.

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