July Outlook: The market sets a record for "calmness"; is summer sluggish or poised for action?

The market has entered a calm period, with trading volume dropping to a 9-month low and volatility hitting a 21-month low, indicating that despite many events in July, the market may experience a slowdown in summer growth.

Despite the intensity of events and numerous news in July, the market may still fall into a calm state. Based on the experience of the past four years, each July has been accompanied by either bullish or bearish impact events, but prices have remained resilient. Traders seem to prefer to "enjoy life" rather than watch the market closely. Is this year going to be different, or is this idea just a fantasy?

July Outlook - Another Calm Summer?

A series of busy events are about to arrive. Trump's actions continue to impact the market, distorting risk sentiment and driving the price of Bitcoin. July will be overshadowed by Trump's potential influence: the "big and beautiful" budget proposal, the end of the tariff suspension period, and the deadline for the latest cryptocurrency executive order are all scheduled for this month.

• Budget Plan: Trump signed the "Big and Beautiful" budget plan on July 5th, Beijing time. The bill is controversial due to its expansionary nature, potentially increasing the U.S. deficit by $3.3 trillion. An expansionary fiscal budget is favorable for scarce assets like Bitcoin, but this benefit may be overshadowed by renewed discussions on tariffs.

• Tariff Issues: The 90-day tariff exemption period will end on July 9, and it is expected that Trump will make more comments regarding different countries, with the impact of new tariffs gradually being revealed and adjusted throughout the month. Reflecting on the experience from February to April, tariff uncertainty can easily suppress market sentiment, negatively affecting Bitcoin.

• Crypto Executive Order: The third item that may arise is the U.S. policy direction related to cryptocurrencies. July 22 is the final deadline for the latest crypto executive order, by which the working group must submit a report recommending legislative and regulatory frameworks and evaluating the U.S. digital asset reserves. These reserves were previously affected by an executive order known as "Strategic Bitcoin Reserves." Although all deadlines for this order have passed, information regarding the current amount of Bitcoin held by the U.S. government, future procurement plans, or compensation to victims has not been made public. Even if no further information is released after July 22, decisions and announcements regarding SBR may still be made at any time.

These events could affect BTC's trend, depending on which factor dominates: fiscal expansion or trade uncertainty. Furthermore, the reduced liquidity due to the July 4th Independence Day holiday in the United States may increase recent market uncertainty and make traders reluctant to take risks.

The "Trump Trade" in evolution and market sentiment

Trump's actions have stirred the market, which is an indisputable fact. During his first six months in office, global uncertainty has increased, leading to a more sluggish market (especially the crypto market). From indicators such as funding rates, open interest, leveraged ETF exposure, trading volume, and options skew, it's hard to imagine that Bitcoin is only 5% away from its historical high. In the current uncertainty-dominated environment, the market's risk appetite is expressed very moderately through the aforementioned financial instruments, resulting in a completely different structural state for prices and risk tolerance compared to past bull market periods.

This suppressed risk appetite can be interpreted as a positive signal for the future of Bitcoin. Limited enthusiasm means that if the subsequent market warms up, the risk of liquidation will also be lower. Currently, there is no reason for the market to undergo large-scale deleveraging, and the overall leverage level remains controlled, which is more suitable for continuing to hold spot positions and maintaining patience during this seasonal bearish market.

History repeats itself or breaks the norm?

Looking back from 2021 to 2024, July is the second least active month of the year in terms of trading volume, despite the fact that July in recent years has been filled with headlines capable of shaking the market.

• In July 2021, after China banned BTC mining, the price of BTC plummeted to its annual low;
• In July 2022, Three Arrows Capital and Celsius entered bankruptcy proceedings;
• Although 2023 has been relatively calm, a well-known asset management company has submitted a BTC ETF application;
• The year 2024 will be particularly turbulent, with Mt. Gox starting to distribute assets at the beginning of the month, the German government selling Bitcoin, Trump surviving an assassination attempt and attending the BTC conference in the middle of the month, and Biden withdrawing from the presidential race at the end of the month.

In an environment lacking signs of market overheating, choosing to continue holding spot assets and maintaining patience may be a more prudent strategy.

In-depth Analysis of Market Data

spot market performance

Trading activity in the spot market has further weakened over the past seven days, with the average daily trading volume (ADV) decreasing by 34% compared to the previous week. The 7-day average trading volume has dropped to $2.18 billion, marking the lowest record since October 15, 2024. This sluggish activity is primarily driven by a narrow consolidation range and a relatively calm news environment.

The trading volume of Bitcoin spot transactions fell to its lowest level since September 2024 in June 2025, continuing the generally sluggish trading trend of the summer. Historical data shows that from June to October, which accounts for only 43% of the year, it contributed only 32% of the annual trading volume. Historically, July (accounting for 6.1% of annual trading volume) and September (accounting for 6% of annual trading volume) are usually the quietest months of the year.

The volatility has also shown a similar pattern. The 7-day volatility has decreased to 0.79%, the lowest point since October 14, 2023. It is worth noting that over the past year, the longest consecutive duration of such low 7-day volatility (below 1%) has only been two days, indicating that more substantial market movements may occur in the short term. Historical data shows that even against the backdrop of the 2021 Chinese mining ban, the 2022 bankruptcy of crypto companies, and major political events in 2024, the average volatility in July, September, and October remains low.

Despite the weak price trend, the capital flow has shown strong performance. The Bitcoin ETP (Exchange-Traded Product) recorded a net inflow of 18,877 BTC in the past week, which was almost entirely contributed by the substantial capital inflow from the US spot ETFs, marking the strongest single-week capital inflow record since May 28. However, the strong capital inflow stands in stark contrast to the stagnant prices, indicating considerable selling pressure in the market.

Therefore, despite the presence of multiple potential market catalysts in July 2025, the market may still linger in a state of low trading volume and low volatility, entering a typical summer slowdown based on past patterns.

Derivatives Market

Overall, the low futures premium, limited capital flow for leveraged ETFs, and the low leverage and moderate returns in the perpetual contract market on a certain trading platform indicate that the market squeeze driven by leverage has limited risk in the short term.

• Futures Market: A certain trading platform's cryptocurrency futures performed flat over the past week, with traders avoiding new directional positions despite the significant expiration of June contracts; overall risk exposure remains muted. The annualized premium for Bitcoin futures remains weak, hovering around 7-8%, and slipped to 6.5% during Tuesday's morning trading, marking the lowest level in the past 8 days.

• Leveraged ETF: The activity of leveraged ETFs has also been moderate, with small outflows of funds occurring continuously since last Thursday, indicating that the market's low-risk appetite remains solid. Over the past week, the open contracts on a certain trading platform decreased by 2,105 BTC, primarily because traders held June contracts worth 8,960 BTC until expiration. Over the past two months, when the price of Bitcoin remained above $100,000, its open contracts have fluctuated in a narrow range of 145,000 to 160,000 BTC.

• Perpetual Contracts: The perpetual contract market also reflects the same cautious sentiment. The 7-day annualized funding rate averages only 2.5%, well below the neutral level of 10.95%. This indicates a continued lack of willingness in the market to establish new long positions, leading to perpetual contract prices remaining below spot prices. The open interest in Bitcoin perpetual contracts is still far below the peak in May, essentially stagnating at the level of 266,000 Bitcoin, only slightly rebounding from last week's low of 257,000 Bitcoin.

• Options Market: Meanwhile, in the Bitcoin options market, due to the prolonged price consolidation and reduced trading activity, the market's demand for directional bets has weakened, and the term structure has trended towards neutrality. At the same time, the long-term consolidation has compressed implied volatility to a new annual low, and the market expects that the summer trend will continue to progress slowly.

The Rise of the Altcoin Derivative Market

In the past year, the relative leverage of the altcoin market has surged dramatically. The ratio of perpetual contract open interest to market capitalization has nearly doubled, increasing from 3% on July 1, 2024, to 5.6% today, indicating that leveraged trading in altcoins is much more active compared to a year ago.

Ethereum's notional open interest increased by 68%, rising from 3.5 million ETH to 6.88 million ETH. Meanwhile, Solana's notional open interest grew by 115%, from 13.2 million SOL to 28.3 million SOL. In contrast, Bitcoin's open interest remained relatively unchanged, moving from 263,000 BTC on July 1, 2024, to 266,000 BTC on July 1, 2025, highlighting that traders' focus is increasingly shifting towards altcoins.

![July Outlook: Trump's Three Major Moves vs. Market's Record "Calm", 7