Bitcoin Gains 9% in July, but On-Chain Data Signals Weak Conviction

Bitcoin (BTC) is on track to post its first monthly gain since April, but the rally has unfolded alongside weakening market activity. 

The cryptocurrency is up 9.3% in July, while spot trading volume has dropped toward multi-year lows. Institutional demand has also cooled, highlighting a disconnect between price performance and market participation.

Bitcoin Spot Volume Sinks to Its Weakest Month in Nearly 3 Years

According to Coinglass, Bitcoin fell 20.4% in June, marking its worst monthly performance since June 2022. That followed a more modest 3.5% decline in May.

July has broken that losing streak. Bitcoin opened the month near $58,000 on July 1, which also marked its monthly low. The asset has broadly trended higher since then and remains in positive territory despite its recent pullback.

At the time of writing on Thursday, Bitcoin was trading near $64,058, up 0.58% over the past 24 hours.

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However, trading activity has failed to keep pace with the price recovery. K33 Research put average daily Bitcoin spot trading volume at roughly $2.2 billion in July. The firm added that July 2026 is on track to record the lowest average daily BTC spot trading volume since November 2023.

“CME open interest remains near multi-year lows, perpetual futures open interest has stalled around 300,000 BTC,” the report read.

On-chain analyst Darkfost tracked the dip across individual venues. According to the analyst, Bitcoin spot trading volumes have fallen by more than 75% compared with late 2024.

Binance handled just over $35 billion in July, against $246 billion in November 2024. Trading volume declined 85% on Bybit, 67% on OKX, and 61% on Coinbase over the same period.

“Against this backdrop, a return of Bitcoin to a bullish trend seems conditional on a shift in the macro regime, and above all a return of demand, the only real driver capable of pushing volumes back up,” the analyst said.

Glassnode measures the same decline in coins rather than in dollars, removing the effect of the price drop. On that basis, spot volume sits at its lowest since 2019. The falling crypto spot volume has been building across the market for months.

Exchange Flows Show Neither Selling Pressure Nor Scarcity

The second channel is quieter still. Analyst Axel Adler Jr. said there has been no clear directional shift in Bitcoin supply based on exchange transfers.

Bitcoin exchange inflows stand near 60,000 BTC on a 30-day average. That reading sits at roughly 76% of the annual average near 79,000 BTC. Inflows stood close to 100,000 BTC a year ago, a decline of about a quarter over 12 months.

Net flow between deposits and withdrawals is currently near -1,300 BTC, down from a slightly positive figure a week earlier. 

“Exchanges are not accumulating additional supply, but there is also no large-scale withdrawal of coins that could create a shortage of liquid supply,” the analyst mentioned.

Glassnode reaches a similar conclusion from the other side. Deposits and withdrawals have both slowed to among the quietest combined levels of the past three years.

“That reads less like distribution or accumulation than like disinterest, a pattern that has often marked the quiet middle of a bear market. With so little moving on-chain, there is not much standing supply positioned to absorb a change in demand should one arrive,” the firm added.

BTC ETF Demand Faded Through July Before Turning Negative

The institutional channel tells the clearest version of the story. Weekly flows into US spot Bitcoin ETFs turned positive in early July, then shrank every week until they flipped.

The week ending July 10 drew $197.4 million. The following weeks pulled in $75.7 million and $33.8 million. The week to July 29 recorded a net outflow of $29.3 million.

The scale is modest against recent history. Record June ETF outflows reached the billions, so July’s numbers may point to indifference rather than flight.

Overall, Bitcoin’s July rebound appears to rest on a fragile foundation. Seasonality adds another potential headwind. Bitcoin has finished each of the past four Augusts in negative territory, with a median monthly return of -7.49%. 

To break that pattern, the market may need a meaningful catalyst alongside a revival in institutional and spot demand. Without those drivers, July’s price gains could prove difficult to sustain.

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