Original Source: K33 Research
Translated by: Yuliya, PANews
The market has entered a calm period, with trading volume dropping to a nine-month low and volatility reaching a 21-month low, suggesting that despite active dynamics in the upcoming July, the market may experience a summer growth slowdown.
Despite the dense events and numerous messages in July, the market may still fall into a state of calm. Looking at the experience of the past four years, every July has been accompanied by impact events that are either positive or negative, but prices have remained resilient, with traders seemingly more inclined to "enjoy life" rather than focus on trading. Is the expectation of something different this year merely a fantasy?
July Outlook - Another Quiet Summer?
A series of busy events are about to unfold. Trump's actions continue to influence the market, distorting risk sentiment and driving Bitcoin's price. July will be overshadowed by Trump's potential impact: the "Big and Beautiful" budget bill, the expiration of tariff suspension, and the deadline for the latest crypto executive order are all on the agenda this month.
- Budget Bill: Trump will sign the "Big and Beautiful" budget bill on July 5th Beijing time. The bill is controversial due to its expansionary nature and may increase the US deficit by $3.3 trillion. An expansionary fiscal budget is favorable for scarce assets like Bitcoin, but this benefit may be overshadowed by renewed tariff discussions.
- Tariff Issue: The 90-day tariff exemption period will end on July 9th, with Trump expected to make more comments targeting different countries. The impact of new tariffs will be gradually disclosed and adjusted throughout the month. Drawing from the experience between February and April, tariff uncertainty can easily suppress market sentiment and negatively impact Bitcoin.
- Crypto Executive Order: The third potential development is the US policy direction related to cryptocurrencies. July 22nd is the final deadline for the latest crypto executive order, by which the working group needs to submit a report, suggest legislative and regulatory frameworks, and assess the US digital asset reserves. These reserves were previously affected by an executive order called the "Strategic Bitcoin Reserve" (SBR). Although all deadlines for this order have passed, information about the current US government's Bitcoin holdings, future purchase plans, or compensation to victims like Bitfinex remains undisclosed. Even if no more information is published after July 22nd, decisions and announcements surrounding the SBR could be released at any time.
These events could influence BTC's trend, depending on which factor dominates: fiscal expansion or trade uncertainty. Additionally, the reduced liquidity caused by the July 4th US Independence Day holiday may increase near-term market uncertainty and make traders reluctant to take risks.
The Evolving "Trump Trade" and Market Sentiment
The fact that Trump's actions stir the market is undisputed. During his first six months in office, global uncertainty increased, leading to a more sluggish market, especially in the crypto sector. From indicators like funding rates, open interest, leveraged ETF exposure, trading volume, and option skew, it's hard to imagine Bitcoin is just 5% away from its all-time high. In the current uncertainty-dominated environment, market risk appetite appears very moderate through these financial instruments, placing price and risk tolerance in a completely different structural state compared to past bull markets.
This suppressed risk appetite can be interpreted as a positive signal for Bitcoin's future. Limited euphoria means lower liquidation risks if subsequent market conditions improve. Currently, there is no reason for large-scale deleveraging, and overall leverage remains controlled, which is more suitable for continuing to hold spot and maintaining patience during this seasonal downturn.
Historical Repetition or Breaking Convention?
Looking back at 2021-2024, July was the second least active month in terms of trading volume, despite the past few years' Julys being filled with headline news capable of shaking the market.
- In July 2021, BTC price plummeted to the year's low point after China banned BTC mining;
- In July 2022, Three Arrows Capital and Celsius entered bankruptcy proceedings;
- July 2023 was relatively calm, but BlackRock submitted a BTC ETF application;
- July 2024 was particularly turbulent, with Mt.Gox beginning asset distribution, the German government selling Bitcoin, Trump surviving an assassination attempt and attending a BTC conference, and Biden dropping out of the presidential race at month's end.
In an environment lacking market overheating signs, choosing to continue holding spot and remain patient might be a more prudent strategy.
Market Data In-Depth Analysis
Spot Market Performance
... [rest of the translation continues in the same manner]Despite weak price trends, fund flows remain strong. Bitcoin ETP (Exchange Traded Product) recorded net inflows of 18,877 BTC in the past week, almost entirely contributed by substantial inflows from US spot ETFs, creating the strongest single-week fund flow record since May 28. However, the strong fund inflows contrast sharply with stagnant prices, indicating significant selling pressure in the market.
Therefore, despite multiple potential market catalysts in July 2025, based on historical patterns, the market may continue to hover in a typical summer lull characterized by low trading volume and low volatility.
Derivatives Market
Overall, the low CME futures premium, limited leveraged ETF fund flows, and low leverage and moderate yields in the perpetual contract market suggest that leverage-driven market squeeze risks are limited in the short term.
[Images omitted]Rise of Altcoin Derivatives Market
Over the past year, the relative leverage rate in the Altcoin market has risen sharply. Its perpetual contract open interest relative to market capitalization has nearly doubled from 3% on July 1, 2024, to 5.6% today, indicating that Altcoin leveraged trading is much more active compared to a year ago.
Ethereum's nominal open interest grew by 68%, from 3.5 million ETH to 6.88 million ETH. Solana's nominal open interest increased by 115%, from 13.2 million SOL to 28.3 million SOL. In contrast, Bitcoin's open interest remained essentially unchanged, from 263,000 BTC on July 1, 2024, to 266,000 BTC on July 1, 2025, highlighting traders' increasing focus on Altcoins.
However, despite the steady rise in open interest, Altcoins' funding rates paint a cautious market picture. During the high market sentiment in November/December last year, the average funding rate for the top five Altcoins by market cap (ETH, XRP, SOL, BNB, Doge) was as high as 60%, 35 percentage points higher than Bitcoin's funding rate. But in the first half of 2025, their funding rates have been close to or even lower than Bitcoin's, indicating a risk-averse sentiment. The coexistence of steady open interest growth and moderate funding rates suggests a highly restrained positioning strategy in the entire market.
