Bitcoin Preserves July Gains as Forced-Selling Fuel Runs Dry, Analysts Say

Bitcoin is on track to end July with a gain of approximately 7.5%, weathering a barrage of headwinds including rising expectations for Federal Reserve rate hikes, climbing bond yields, a sharp unwind in AI-related trades, and a high-profile security incident involving Coldcard, one of bitcoin's best-known hardware wallet brands.

The largest cryptocurrency by market capitalization slipped below $63,000 on Friday, falling about 3% on the day to trade around $63,408.52. Despite that pullback, BTC is set to close the month with a respectable advance, consolidating above its bear-market lows even as risk appetite cooled across other segments of the financial markets.

Resilience Tied to Deleveraging

Part of bitcoin's relative stability stems from positioning, according to analysts at Bitfinex. Crypto markets entered the latest Fed meeting period with significantly less leverage than equities, after derivatives traders were largely flushed out during the late-June selloff that drove BTC below $58,000 on July 1. That selloff coincided with large-scale bitcoin transfers by the German government and the start of long-awaited creditor repayments from the defunct Mt. Gox exchange, events that had rattled sentiment before leverage was ultimately reset.

Since that flush-out, average daily liquidations have remained well below this year's typical range of $400 million to $500 million, suggesting that there has been little forced selling despite the macro shock, Bitfinex noted.

"Crypto fell less than levered equity themes because the forced-selling fuel was already spent," the Bitfinex analysts wrote.

Coldcard Exploit Adds to Security Concerns

Markets are also digesting the fallout from a major exploit involving Coldcard, which has resulted in at least $38 million worth of bitcoin being stolen. The incident has not materially affected price action, but it has reignited debate around the risks of self-custody — one of crypto's foundational promises — as digital asset-related exploits have surged.

Paul Howard, director at trading firm Wincent, noted that the stolen proceeds had not yet been liquidated but cautioned about near-term price impact. "The knock-on effect of this and the likelihood of liquidation will weigh on bitcoin pricing in the near term," Howard said. More broadly, he added, the exploit highlights the operational risks that continue to accompany self-custody.

Macro Uncertainty Dominates Outlook

Looking ahead, macroeconomic uncertainty remains the dominant theme for traders and investors. Bitcoin has increasingly traded in step with risk assets, particularly technology equities, making it sensitive to shifts in rate expectations.

Jeff Anderson, managing partner at STS Digital, said markets may be entering "a new volatility regime" as investors oscillate between expectations for rate cuts, pauses, and further hikes. That uncertainty is likely to keep pressure on high-beta assets such as bitcoin until the economic outlook becomes clearer, Anderson noted.

Bitfinex analysts expect investors to remain defensive heading into next week's U.S. jobs report — the next major macro catalyst following the Fed meeting. Rather than fretting about another wave of forced liquidations, they argue the bigger question is whether spot bitcoin ETF inflows will resume once markets have a clearer read on the Fed's policy path. U.S. spot bitcoin ETFs, which began trading in January after SEC approval, have become a closely watched gauge of institutional demand, and their flow trends now serve as a key barometer for market sentiment.

"We believe positioning stays defensive while hike risk is live," the Bitfinex analysts wrote. "The institutional bid being aggressive or price-agnostic is the signal for traders which has not fired yet."

Lacie Zhang, research analyst at Bitget Wallet, offered a similar assessment. "Base case is a choppy August with bitcoin range-bound unless real yields fall or ETF flows turn consistently positive again," Zhang said. "The market can absorb a neutral Fed, but not a stronger dollar, higher real yields, and weak ETF demand all at once."