Bitcoin Gains 7.5% in July, but August Seen Stuck in a Range

Bitcoin rose about 7% in July, but analysts say it will need a clear catalyst to extend those gains in August.

CoinDesk reported on August 1 that Bitcoin fell about 3% on the day, yet still posted a 7.5% gain for the month.

Despite a string of headwinds — including the possibility of additional Federal Reserve rate hikes, weakness in artificial intelligence-related stocks and security incidents — Bitcoin held up relatively well, CoinDesk said.

Analysts expect Bitcoin to struggle to establish a clear direction in August. Investors are likely to remain sidelined until U.S. employment data are released and the Fed's policy path becomes clearer.

Bitfinex, a digital-asset research firm, said defensive positioning is likely to persist until U.S. macroeconomic data are published. As long as the possibility of further rate hikes remains, investors are expected to stay cautious, its analysts said.

The bigger issue for market participants is not the risk of additional forced liquidations, but whether institutional money returns through spot Bitcoin exchange-traded funds after the Fed's policy direction becomes more clear, the firm added.

Lacey Zhang, a research analyst at Bitget Wallet, said the base-case scenario for August is rangebound trading. A shift back to an uptrend will be difficult unless real yields fall or inflows into spot Bitcoin ETFs resume a steady increase.

Markets can absorb a neutral Fed stance, Zhang said. But a combination of dollar strength, rising real yields and sluggish ETF inflows would be harder to withstand.