Bitcoin On Course to End July in the Red – More Anguish For BTC This August?
Bitcoin (BTC), the world’s first and largest cryptocurrency by market capitalization, is on course to close out an uncharacteristically weak July lower by about 4% and stuck within familiar ranges in the low $29,000s.
Month-end positioning could introduce an element of chop into the market, but bitcoin trading conditions are expected to remain fairly subdued given an influx of key US economic data releases later in the week, including ISM PMI survey results, JOLTs Job Openings data and the official jobs report for July.
Bitcoin has been broadly unimpacted by macro in recent months.
Instead, the BTC market has seemingly been more focused on themes like 1) institutional adoption amid the recent wave of spot bitcoin ETF applications from Wall Street heavyweights like BlackRock and 2) the US Security and Exchange Commission (SEC)’s ongoing regulation by enforcement push.
But if this week’s US data continues to strengthen the “soft landing” narrative – the idea that the Fed can get US inflation under control without causing a recession – this could be a plus for risk assets.
Tech stocks have been rallying in recent weeks, with the Nasdaq 100 index only within around 6% of its all-time highs.
If the tech rally extends this week, that could create tailwinds for BTC.
While the correlation between BTC and tech stocks has weakened substantially in recent months, it has normally been very strong since 2020.
As per CoinMetrics, bitcoin’s 60-day Pearson correlation to the (admittedly less tech-dominated) S&P 500 was last around 0.1 (very weak, but still positive), down from highs above 0.70 in H1 2022.
Having performed poorly in July, bitcoin is on the backfoot heading into what has historically been its second weakest month of the year.
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