Bitcoin Price Volatility Expected in July as Traders Monitor US Economy

Bitcoin’s journey in the coming month may face turbulence as market players analyze U.S. economic indicators amidst persistent inflation and a tech-driven stock market surge. The U.S. real GDP surged to an annual rate of 1.4% in Q1 2024, contrasting sharply with the 3.4% increase in the previous quarter. Additionally, the personal consumption expenditures index for May showed a slight dip to a 2.6% year-over-year increase from April’s 2.7%.

“This slowdown suggests potential economic cooling,” noted Jag Kooner, Bitfinex’s head of derivatives. As July progresses, market participants are advised to monitor regulatory developments and macroeconomic policies for potential volatility. A potential economic slowdown could prompt the Federal Reserve to consider rate cuts, potentially benefiting risk assets like Bitcoin.

Historical trends indicate that during economic downturns, investors often turn to Bitcoin as a store of value, Kooner explained. The Fed’s policy direction is eagerly anticipated, with futures traders pricing in two rate cuts expected in the final quarter of the year.

While some anticipate increased volatility in July, others like Pratik Kala, head of research at DigitalX, foresee a period of consolidation and low volatility. Kala highlighted the third quarter as traditionally low in volatility due to key U.S. decision-makers being on holiday.

Bitcoin recently hit a peak near $63,700, showing a 14% decline from its March all-time high. As the market navigates economic uncertainties, Bitcoin’s role as an alternative investment may gain traction. Further insights on Fed policy are expected at the upcoming Federal Open Market Committee meeting in late July.

As the world’s largest cryptocurrency continues its journey, market participants remain watchful for potential catalysts that could influence its trajectory, especially as the U.S. elections draw closer.