Bitcoin eyes extension of July rally after reclaiming $60K, but bear market risks remain — CryptoQuant
- Bitcoin could extend its July gains after reclaiming $60,000, supported by historically strong seasonal performance during bear market cycles.
- Improving spot and futures demand, alongside easing US selling pressure, signals market conditions are gradually stabilizing after June's sharp contraction.
- Despite recovering demand, bearish conditions persist, as the Bull Score Index remains well below bull market territory.
Bitcoin (BTC) could be positioned for further gains this month after reclaiming the $60,000 level, as historical July seasonality, improving demand and easing selling pressure point to stronger short-term momentum, according to a Wednesday market report by CryptoQuant.
July seasonality points to further upside for Bitcoin
The report noted that July has historically been one of Bitcoin's strongest months, particularly during bear market cycles. Over the past decade, the asset has posted gains in most Julys, including rallies of about 20% in 2018 and 17% in 2022 despite broader market weakness.
"With Bitcoin entering July 2026 fresh off a bear-market low, this seasonal pattern skews the near-term risk toward further upside," CryptoQuant wrote.
The seasonal outlook comes as Bitcoin has recovered from a recent low of $58,000 and reclaimed the $60,000 level. CryptoQuant also highlighted a notable improvement in Bitcoin demand after one of its sharpest contractions in recent years.
The 30-day change in total Bitcoin demand, which combines spot market activity and perpetual futures positioning, fell to around -650,000 BTC in early June, marking its steepest decline since 2022.
That reading has since recovered toward neutral as speculative futures demand turned slightly positive while spot market selling slowed significantly.
"A move back into positive territory would confirm that the demand engine is re-igniting," the report stated.
Improving US investor sentiment could aid recovery
Another factor supporting Bitcoin's recovery is improving demand from US investors. The Coinbase Premium Index recovered from deeply negative levels recorded in early June. The index has improved to -0.062, suggesting selling pressure from US investors has eased even though demand has yet to turn fully positive.
"Although still below zero, the improving premium has coincided with Bitcoin's climb back to $64K and points to stabilizing institutional appetite," CryptoQuant noted.
Onchain valuation metrics also indicate that Bitcoin recently entered an area historically associated with market bottoms. CryptoQuant signaled that unrealized profit and loss margins for BTC held between one and three months dropped below -24% in early June, below the -12% threshold that has previously signaled short-term undervaluation.
"Historically, readings at these extremes have often coincided with local bottoms as short-term holders capitulate," the firm noted, adding that the metric has started recovering alongside Bitcoin's rebound from $57,700.
Bear market conditions remain intact despite recent Bitcoin recovery
Despite the improving indicators, CryptoQuant cautioned that broader market conditions remain firmly bearish. The firm shared that its Bull Score Index, which tracks onchain activity, market conditions and valuation metrics, currently sits at 20.
Readings below 40 indicate bearish conditions, while scores above 60 have historically aligned with sustainable bull markets.
"A sustainable rally and a true bull-market regime would require the score to climb back above 60; until then, the rebound is best read as a bear-market recovery, not a trend reversal,” CryptoQuant wrote.
Bitcoin is trading at $62,010, down nearly 2% in the past 24 hours at the time of writing.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addition to
