Bitcoin survived July’s biggest shocks: What’s next?

Bitcoin managed to finish July up nearly 8 percent. BTC defied rate-hike fears, the AI-driven sell-off and a major exchange security breach. However, traders are now waiting on cues from the jobs data and a potential return of spot Bitcoin exchange-traded funds. The OG crypto price is still down by more than 28% year to date (YTD).

Bitcoin price dropped by almost 3% on the last day of July 2026. The drawdown was insufficient to derail the rally. Analysts attributed the lack of leveraged exposure on the derivatives markets after a selloff in late June, which saw the price fall below $58,000 and trigger large liquidations of leveraged positions. This, they argued, made the markets less vulnerable to further declines as the Federal Reserve began its rate-hike cycle.

Did Bitcoin avoid a deeper selloff?

According to the report, the average daily liquidations since early July remained well below the peak of $400 million to $000 million recorded at various points through the year. “Crypto fell less than levered equity themes because the forced-selling fuel was already spent,” the analysts wrote.

It was also reflected in the performance of crypto compared to the broader markets. On Friday, the final day of July, both Bitcoin price and Ether fell sharply despite South Korea’s Kospi index rising over 15 percent and U.S. equity futures hitting record highs.

BTC remained resilient despite the technical development, where one of the leading self-custody hardware wallet providers, Coldcard, became the victim of a major security breach. Earlier, it was reported that the attack had resulted in the theft of at least $38 million in Bitcoin. Later, Galaxy Research reportedly claimed that the losses were around $70 million in crypto assets.

Coinglass data shows that Bitcoin had printed a red index and posted a dump of more than 14% in the second quarter of 2026. However, the third quarter is still green, giving hope of a rally ahead.

How much longer can the rally last?

While the immediate outlook remained broadly positive, several analysts were cautious, noting that markets were now entering a period of heightened volatility due to conflicting views about the prospects for rate hikes. An analyst noted that investors were caught in a tug of war between dovish and hawkish scenarios, which was weighing on high-beta assets. Markets are entering a new volatility regime as we transition from a period of policy tightening to speculation about cuts. Simultaneously, there are concerns about higher rates dampening risk appetite. 

Bitfinex analysts expect the same dynamics to play out in August, with positioning remaining net long, albeit tentatively, while a rate hike by the Federal Reserve continues to be priced in. “The signal for traders which has not yet fired is the institutional buying of bitcoin at aggressive levels,” they wrote, noting that the open interest for Bitcoin futures had remained relatively static at around 750,000 BTC throughout the month. This reflected the reluctance of traders to build leveraged positions despite the bullish onboarding of new investors.

The base case for August is range-bound Bitcoin with limited short-term volatility if yields remain range-bound or ETF flows turn consistently positive. Meanwhile, a neutral outcome from the Federal Reserve was acceptable, but persistent dollar strength, higher yields and weak ETF inflows would weigh on prices.

Diminished prospects for corporate holders

The cautious outlook for the markets in the months ahead has implications for corporate players. As the largest institutional bitcoin holder with 843,775 BTC as of late July, Strategy has been heavily impacted by the recent price action, recording a second consecutive quarter of losses. 

According to the firm’s earnings report released on July 30, it recorded a net unrealized loss of $8.22 billion, driven by an $8.32 billion loss in the second quarter. “We acquired additional bitcoin and treasury securities and reduced our convertible debt issuance during the quarter while navigating muted bitcoin prices and market conditions,” said Michael Saylor, chairman of Strategy, in a statement.

For now, the focus for corporate holders appears to be on demand generation. “The critical test for institutional demand will come in the form of increased inflows into spot bitcoin ETFs,” noted Bitfinex analysts, who suggested that their appearance in early July had failed to deliver on initial expectations.

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