A Perfect Storm Converging in July
The crypto market is navigating a difficult period defined by geopolitical instability, a lack of liquidity, and events that are suppressing prices. Compounding this, the largest treasury in the world from a crypto perspective — Michael Saylor's operation — now issues daily announcements that appear to be unsettling the market. Yet, stepping back from the short-term noise, the long-term view remains genuinely and strongly bullish. A perfect storm of factors is converging for crypto in July, and there is reason to expect the current pressure to pass soon. In fact, Bitcoin's next move has the potential to shock the world.
The Price Action: Two Things Can Be True at Once
Bitcoin just closed its lowest monthly candle since September of 2024. However, with the arrival of July, day one is already showing an uptick. In a single stretch of four hours, roughly $100 million in short positions were liquidated as Bitcoin jumped back above $60K.
Two things can be true simultaneously: yes, Bitcoin's price fell to its lowest point in two years, but it may also be time for a relief rally. What makes this particular move interesting is that spot buying is supporting the price action. The initial pump was driven by shorts being liquidated, but it was also underpinned by genuine spot demand. As long as that spot demand persists, the upward momentum can continue.
The Technical Picture
Despite the bounce, it is important to be clear-eyed about the setup. Bitcoin remains below its major moving averages, which is a bearish condition. On the other hand, several signals are bullish: the RSI hit a record low, there is bullish divergence forming, and the market is approaching oversold territory.
The key levels to watch are as follows:
- If $58K breaks, $55K is the next target to the downside.
- To turn short-term bullish, Bitcoin needs to reclaim above $62.5K.
- Beyond that, the bulls must reclaim the 200-day moving average at approximately $62.4K, followed by resistance at $64K.
Bitcoin is therefore sitting in a consolidation zone. In the short term, it looks as though prices could go lower — and that is precisely what nearly everyone is predicting. But that near-universal bearishness is exactly the sentiment that typically dominates near a bottom, especially after three consecutive quarters of lower lows and three straight monthly red candles, a pattern reminiscent of 2020. The counter-narrative is that a reversal, similar to what followed that earlier period, could unfold over the next few months.
A 14-Week Countdown
There is a specific structural timeline worth noting. The long-term holder cost basis sits at about $49K and is rising, while the short-term holder cost basis is at $69K and falling. At the current pace, these two lines collide in roughly 14 weeks. Historically, this kind of convergence has marked the final innings of Bitcoin bear markets. Fourteen weeks from now could look very similar to the equivalent point in the last cycle. The central question for investors becomes: are you able to wait 14 more weeks?
The Regulatory Backdrop: A Pro-Crypto Shift
A major bullish theme is the changing posture of U.S. regulators. In breaking news, SEC Chair Paul Atkins stated that he wants crypto to flourish in the United States, describing this as one of his main objectives since day one. He explained that the president challenged the agency to make the U.S. the crypto capital of the world, and that is what they are now doing.
Atkins drew a sharp contrast with the previous administration, under which the SEC and other agencies treated digital assets as though the assets themselves were "evil," rather than distinguishing the assets from the bad actors who might misuse some of them. The new goal is to reverse that: to bring back innovators who fled the United States to build their products abroad, so they can develop their products domestically under American laws, for American investors and customers. The underlying philosophy is to let American investors decide for themselves whether they want to buy and invest in these products, rather than having the government make that decision on their behalf. In short, the SEC is now overlooking crypto without fighting it, creating an environment in which it can flourish.
The Clarity Act
A central piece of pending legislation is the Clarity Act. Interestingly, prediction markets are counting it out — participants there are not bullish that it will pass before the midterms. Yet many prominent names in U.S. regulation are stating that this is the main thing they are working on and that they genuinely want it passed.
SEC Commissioner Hester Peirce publicly put her reputation on the line, expressing optimism that the Act will get done over the summer. She emphasized that the House has already completed its work and that the Senate has been working hard on the bill. Drawing on her own experience from time spent on the Senate Banking Committee, she acknowledged that legislation is very hard — there are many moving pieces, and this is a large piece of legislation attempting to accomplish a number of difficult things at once. Nevertheless, she believes good progress is being made and expects to see it pass soon.
The Trump Crypto Controversy
Some of the biggest crypto headlines — reaching well beyond the crypto world — concern the president's personal financial involvement. After the release of Trump's financial disclosures and an analysis of more than 900 pages of documents, the figures show that Trump has made $1.1 billion from crypto. The breakdown is roughly:
- $600 million from the Trump memecoin
- $200 million from the World Liberty Finance token sale
- Almost $200 million from the sale of ownership interest in their stablecoin
- $65 million from the sale of part of Trump's World Liberty Finance
- $6 million from Melania's NFT sales
- $1.2 million from staking their Ethereum
This has left many people, both inside and outside of crypto, with a bad taste in their mouths. One striking observation is that Trump apparently made more from crypto than Coinbase did — meaning he personally earned more from crypto than every publicly traded U.S. crypto company combined. That is a remarkable statement for a self-described pro-crypto president.
It is also worth noting that Trump remains a substantial holder. He holds more than $100 million in Bitcoin, $50 million of which is in cold storage; $55 million in Ethereum, roughly half of which is also in cold storage; along with the World Liberty token, the stablecoin, and other top DeFi crypto projects. He continues to hold and remains bullish, as does JD Vance.
The pointed commentary here is that Trump takes care of himself first. The hope for the industry is that taking care of crypto comes second — and it does appear that supporting crypto remains hugely important to him. In his own framing, Trump says he wants to make crypto great for America, arguing that crypto is the kind of industry where there will be a clear number one and effectively no number two. He does not want China to be number one; he insists the U.S. is currently number one by a long shot, the same way it leads in AI, and he wants to keep it that way.
The Federal Reserve and Macro Signals
The macroeconomic backdrop was addressed by Fed Chair Kevin Warsh at the ECB forum. Warsh gave no hints about the direction of July rates, and the most likely outcome is that rates remain unchanged. He stressed that the Fed is independent, expressed strong bullishness on the U.S. economy — particularly with respect to AI — and was generally optimistic. Rate cuts do not appear likely this month, though cuts later this year or next year are plausible.
There is an argument that Warsh's comments were secretly bullish. Recalling the committee's most recent assessment, he described labor markets as steady, the demand side of the economy as solid, and the supply side — especially capex and productivity, even before the fruits of AI are visible — as strong. He noted a strong theme of open-mindedness on questions of AI and productivity, while also acknowledging that prices are too high and reaffirming a firm commitment to price stability.
When pressed on whether the market was right to interpret his first news conference as hawkish, Warsh sidestepped the characterization, joking that his senior colleagues had advised him not to take the bait. Still, he offered substance: inflation expectations over the first four weeks of this period have come down, and inflation risks have come down as well. He was emphatic that anyone in the household, business, or financial-market sectors who expected the central bank to be comfortable with an inflation objective above 2% would be disappointed. The committee has signed up to deliver price stability in the U.S., and that remains the objective — with the tactics and strategy still to come.
Finally, on the question of political pressure, the message was unequivocal: no matter what the president wants, the institution has been an independent central bank for a very long time, will remain independent at this moment, and there will be no changes on that front.
Bottom Line
The picture that emerges is one of genuine tension between short-term bearishness and long-term optimism. Bitcoin has printed its lowest monthly close in two years and remains below key moving averages, yet oversold conditions, bullish divergence, spot demand, and a converging cost-basis structure roughly 14 weeks out all point toward a potential cycle bottom. Layered on top of the technicals is an unusually supportive policy environment — an SEC actively courting the industry, a Clarity Act that insiders expect to pass this summer, and a president deeply and personally invested in keeping America number one in crypto — set against a Fed that is holding the line on price stability and its own independence. The overwhelming consensus is bearish in the short term, but that consensus is precisely the kind that tends to appear at the bottom.
