The cryptocurrency market is entering a pivotal phase as July unfolds, with experts suggesting a potential shift in momentum. While Bitcoin and Ethereum remain at the center of investor attention, market dynamics are signaling divergent paths—particularly in terms of ownership concentration and breakout potential. Analysts point to macroeconomic trends, ETF inflows, and derivatives positioning as key drivers that could push prices higher in the coming weeks.
Market Eyes $110,000 Bitcoin Breakout
At the heart of the current market narrative is Bitcoin’s movement around the $110,000 mark. This level has become a psychological and technical inflection point. If BTC/USD sustains above this threshold, it could trigger a broader rally across the crypto ecosystem. Conversely, failure to hold could keep the market in a consolidation phase.
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According to Iliya Kalchev, analyst at Nexo Dispatch, this summer may defy the typical seasonal slowdown observed between July and September. Historically, crypto markets have seen reduced volatility and trading volume during these months, but 2025 appears different.
Kalchev attributes this shift to consistent inflows into crypto ETFs, particularly spot Bitcoin and Ethereum funds. These products are attracting both retail and institutional capital, creating a structural support for prices. Additionally, ongoing corporate accumulation—where companies continue to add digital assets to their balance sheets—adds another layer of demand.
“Long-term holders are showing no signs of exiting,” Kalchev told Benzinga. “This reflects strong conviction in the long-term value proposition of cryptocurrencies.”
Macroeconomic Tailwinds: M2 Growth and Fed Policy
Another factor bolstering optimism is the expansion of the U.S. money supply. The M2 money supply recently crossed $21.9 trillion, indicating increased liquidity in the financial system. Historically, periods of rising M2 have correlated with strong performance in risk assets—including equities and cryptocurrencies.
This liquidity backdrop may be especially favorable for Bitcoin, often viewed as a hedge against inflation and monetary expansion.
However, much hinges on the Federal Reserve’s next move. Upcoming labor market data will be critical in shaping expectations for interest rate cuts. Should employment figures show weakness, markets may price in more aggressive easing—potentially as much as 100 basis points by year-end.
Such a scenario would likely benefit not only Bitcoin but also altcoins, which tend to thrive in low-rate environments.
Derivatives Market Signals Strength
The options market is also flashing bullish signals. Bitcoin contracts expiring in late July are pricing in a move toward $113,000**, while September options suggest a path toward **$140,000 under optimistic conditions.
Ethereum derivatives reflect similar sentiment. Options expiring this month show concentrated open interest around the $3,200 level for ETH/USD, indicating trader confidence in a continued upward trajectory.
These derivatives positions suggest that professional traders are positioning for upside rather than downside risk—a shift from earlier in the year when hedging dominated.
Ethereum Emerges as the 'Underowned' Opportunity
While Bitcoin remains the flagship asset, attention is turning to Ethereum as a potentially undervalued player. James Harris, Group CEO at Tesseract, noted that Ethereum is currently “underowned” relative to its ecosystem strength and utility.
This underownership could set the stage for outperformance. As investor appetite broadens beyond Bitcoin, Ethereum’s robust developer activity, decentralized finance (DeFi) dominance, and growing adoption in real-world asset tokenization make it an attractive candidate for capital rotation.
“Ethereum may start to outperform as the market adjusts,” Harris said. “But it remains uncertain whether we have all the conditions in place for a sustained altcoin rally.”
Still, Harris highlighted that July has historically been a strong month for Bitcoin—second only to November over the past decade. With markets already pricing in significant rate cuts by year-end, a breakout toward $125,000 is within reach.
Key Resistance and Investor Strategy
Despite the bullish outlook, caution remains warranted. Georgii Verbitskii, founder of crypto investment app TYMIO, emphasized that Bitcoin is testing the upper boundary of its recent trading range.
“If Bitcoin can break and sustain levels above $110,000, we could see a gradual move higher,” Verbitskii said. “But if the price fails to hold above that threshold, sideways trading will likely continue.”
He stressed that patience is essential. The signal to deploy larger positions will only come if Bitcoin establishes multi-day support above $110,000—confirming that resistance has turned into support.
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Core Keywords Driving Market Sentiment
The current market conversation revolves around several core keywords:
- Bitcoin
- Ethereum
- crypto ETFs
- M2 money supply
- Federal Reserve
- derivatives market
- underowned assets
- rate cuts
These terms are not only central to analyst discussions but also reflect what investors are actively searching for online. Their natural integration into market commentary enhances both readability and SEO performance.
Frequently Asked Questions (FAQ)
What does it mean for Ethereum to be 'underowned'?
"Underowned" means that investor exposure to Ethereum—relative to its fundamentals and market potential—is lower than it should be. This can create opportunity, as capital may rotate into undervalued assets during broader rallies.
Why is $110,000 such an important level for Bitcoin?
$110,000 is a psychological and technical resistance level. Breaking and sustaining above it signals strong buyer conviction and could trigger algorithmic and institutional buying that pushes prices higher.
How do rate cuts affect cryptocurrency prices?
Lower interest rates reduce the opportunity cost of holding non-yielding assets like Bitcoin and Ethereum. They also increase liquidity in financial systems, often leading investors to seek higher returns in risk assets—including crypto.
Are crypto ETFs influencing price action?
Yes. Spot crypto ETFs provide regulated exposure to digital assets, attracting institutional capital. Sustained inflows into these funds add consistent buying pressure, supporting price appreciation.
What role does M2 money supply play in crypto markets?
Rising M2 indicates more money circulating in the economy. Historically, such periods correlate with increased investment in speculative and inflation-hedging assets—making them favorable for cryptocurrency performance.
Is July typically a strong month for crypto?
Bitcoin has shown strong historical performance in July, ranking second only to November over the past decade. Combined with current macro conditions, this seasonality adds to bullish expectations.
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Final Outlook: Cautious Optimism for July
While momentum is building, the path forward isn't guaranteed. A confirmed breakout above $110,000 could unlock significant upside for Bitcoin—and by extension, Ethereum and select altcoins. However, without sustained momentum or supportive macro developments, the market may remain range-bound.
For investors, the key takeaway is clarity: wait for confirmation before making aggressive moves. But with ETF inflows steady, liquidity expanding, and structural demand intact, the odds appear tilted toward a bullish July—one where only one major asset may still be flying under the radar.