Written by: Asher Zhang, Bitpush
The author predicts that Bitcoin may encounter a heavy blow in early July, but the long and short forces will quietly change in mid-to-late July. The author has preliminarily written the script for July based on various information. So, what will Bitcoin rely on to win this turnaround?
Dark clouds are looming over the city, what kind of pressure will BTC face at the beginning of the month?
The recent frequent selling of Bitcoin and Ethereum by the US and German governments has put pressure on the market. At the same time, Mt.Gox will start paying out in July 2024, and Bitcoin is expected to be under huge selling pressure in early July.
According to data from blockchain analysis company Chainalysis, the U.S. government transferred about 3,940 bitcoins worth about $240 million to the Coinbase exchange on June 26, 2024. Market analysts believe that this was most likely seized from convicted drug dealer Banmit Singh in January 2024. The U.S. government currently owns about 214,000 bitcoins worth $13 billion, and the U.S. government remains the largest national holder of Bitcoin. On July 1, according to Arkham monitoring, the U.S. government wallet address transferred about 3,375 ETH to the address starting with 0x5ac4 at 16:34, equivalent to about $11.72 million.
According to Bitpush, the German Federal Criminal Police (BKA) began transferring about 11,100 bitcoins worth about $72.4 million to cryptocurrency exchanges such as Kraken and Bitstamp in mid-June. This batch of bitcoins was the illegal proceeds seized by the German government in 2013. On July 1, according to Lookonchain monitoring, the German government transferred another 1,500 bitcoins ($94.7 million), of which 400 bitcoins ($25.3 million) were transferred to Bitstamp, Coinbase and Kraken. Currently, the German government owns about 470,000 bitcoins, making it one of the countries with the largest bitcoin reserves in the world. The German government has always been cautious about cryptocurrencies and has repeatedly expressed concerns that cryptocurrencies may be used for money laundering and other illegal activities. It is worth noting that the German government is developing cryptocurrency regulatory regulations, which are expected to take effect in 2025. The German government may want to signal to the cryptocurrency market its stance on cryptocurrencies by selling bitcoins.
In addition to the continued selling by the US and German governments, the main selling pressure still comes from Mt.Gox. According to the official website, the latest repayment plan provided by Mt.Gox to creditors includes basic repayment and proportional repayment. The basic repayment part allows the first 200,000 yen claimed by each creditor to be paid in yen, and the proportional repayment provides creditors with two flexible options, namely "early one-time repayment" or "mid-term repayment and final repayment". Among them, the one-time repayment method can only allow creditors to obtain partial compensation (the funds they locked on the platform at the time of the hacker attack were about 21%), and the part exceeding 200,000 yen allows creditors to choose a mixture of BTC, BCH and yen or pay the full amount in legal currency. According to the latest news, Mt.Gox will start making compensation in July 2024.
Macroeconomic expectations may improve, and Ethereum ETF will bring new funds to the crypto market
This article believes that the factors that will enable Bitcoin to make a comeback in July mainly include: the launch of the spot Ethereum ETF, the macro market, technological updates, and Trump’s potential support.
This week, there are many important events in the macro market. From the current market analysis, it is expected to have a positive impact on the crypto ecosystem. On July 1, the United States released the June ISM Manufacturing PMI; on July 2, Federal Reserve Chairman Powell, European Central Bank President Lagarde and Brazilian Central Bank President Neto spoke at the Central Bank Forum held by the European Central Bank, and the Reserve Bank of Australia released the minutes of the June monetary policy meeting; on July 3, the United States announced the ADP employment in June and the number of initial jobless claims in the United States that week; on July 4, the Federal Reserve released the minutes of the monetary policy meeting, the United Kingdom held a general election, and the European Central Bank released the minutes of the June monetary policy meeting; on July 5, the United States announced the June unemployment rate and the US June non-farm employment population.
Adam, a macro researcher at Greeks.live, posted on the X platform that this week (7/1-7/7) is a big macro week, with the most important being the US unemployment rate and non-farm data on Friday. The macro market, which has been silent for many days, has made a comeback, and there are important macro events every weekday. In terms of encryption, the market expects that the SEC may respond to the ETH ETF on the week of July 8, which is likely to be good news. The quarterly delivery has just ended, and the IV of each major term is very low, which is a good opportunity to build a position.
According to current news, the Ethereum ETF may be launched as early as early July, which will inject new funds into the crypto market. Unlike the lack of ecology on the Bitcoin chain, the influx of new funds into Ethereum is expected to further promote the development of the Ethereum ecosystem.
Bitcoin may usher in major technological updates, and Trump is expected to help Bitcoin counterattack
The author has always believed that it is technological innovation that has driven the development of Bitcoin and the crypto industry, whether it is the past ICO, DeFi, Layer2; or the Ordinals protocol, BRC20, ARC20, etc. of the Bitcoin ecosystem. This article believes that the recent hotly debated OP_CAT will undoubtedly drive the development of Bitcoin in the future.
The OP_CAT feature was proposed by Ethan Heilman and Armin Sabouri in October last year and was recently launched on the Bitcoin test network Signet and assigned the BIP-420 number. On July 1, OP_CAT supporter and Taproot Wizards CEO Udi Wertheimer said during an appearance on the Xverse podcast that the probability of OP_CAT being activated is "close to 100%." Many well-known people in the crypto industry, such as Solana Labs co-founder Anatoly Yakovenko, added "BIP-420" to their usernames on the X platform. Taproot Wizards launched the Quantum Cats Ordinals series in February to promote OP_CAT. In April, Taproot Wizards released a white paper outlining a framework for building applications using OP_CAT. Earlier, Starknet said on the X platform that Starknet will try to expand the execution layer of both Bitcoin and Ethereum at the same time. It can be seen that OP_CAT will inject new vitality into the Bitcoin ecosystem.
In addition to technology updates, Trump may lead a group of retail investors to influx in late July. On June 25, technology media Axios quoted two people familiar with the matter as saying that former US President Trump is discussing giving a speech at the Bitcoin 2024 conference in Nashville at the end of July. The Bitcoin 2024 conference will be hosted by Bitcoin Magazine and is scheduled to be held from July 25 to 27. Representatives of Bitcoin Magazine did not respond to requests for comment.
Considering Trump's previous remarks, Trump's participation in the Bitcoin conference is not groundless. According to a report by BitPush on June 12, Matthew Schultz, executive chairman of the cryptocurrency mining company CleanSpark, revealed that several Bitcoin miners met with Trump at Trump's Mar-a-Lago estate on Tuesday night. Schultz pointed out that Trump said he loves and understands cryptocurrency, and the existence of Bitcoin miners helps stabilize the energy supply of the US power grid. Trump promised to speak out for cryptocurrency miners if he enters the White House. In addition, Trump himself posted on his Truth Social platform that Bitcoin mining is the last line of defense for the United States against other central bank digital currencies, and he hopes that all remaining Bitcoins can be made in the United States. Earlier, the Trump campaign team announced that it would accept cryptocurrency donations, which was seen as a high-profile embrace of the cryptocurrency industry.
Trump's recent high-profile announcement of support for Bitcoin may be largely due to the need for election campaigns. After all, Bitcoin and the crypto market have a huge group and capital support. Cathie Wood, CEO of US investment institution Ark Invest, said that she plans to vote for Republican candidate and former US President Donald Trump in this year's US presidential election. Wood has long been a supporter of cryptocurrencies, and Trump recently expressed strong support for the cryptocurrency industry, which is also the main reason why Cathie Wood voted for Trump.
Summarize
Let's summarize the script of Bitcoin in July. Overall, Bitcoin is expected to perform weakly in early July, mainly because the US, German governments and Mt.Gox compensation will create selling pressure on Bitcoin. At the same time, the first week of July will inject some macro-optimism into Bitcoin from a macro perspective; as the Mt.Gox compensation is digested by the market, Bitcoin is expected to gradually strengthen; in late July, Trump will most likely inject a shot in the arm for Bitcoin. At the same time, OP_CAT, the core kinetic energy that really drives Bitcoin's rise, will truly promote the development of Bitcoin and its ecosystem.
Finally, from the perspective of seasonality, Bitcoin may also rise. According to Bitpush, QCP Capital analysts said in a report on Monday: "From a seasonal perspective, Bitcoin's median return in July was 9.6%, and it tends to rebound strongly, especially after a 9.85% drop in June. Many signs indicate that July will be bullish." Coinbase analysts David Duong and David Han said in a weekly report: "Positive seasonal factors and improved liquidity in July may support the market."
