Bitcoin rally nears $68,000 test as summer slumber grips crypto

Bitcoin rose above $66,600 on Tuesday, its highest in more than a month, extending a 15% rebound from the July 7 low near $58,000.

"The first retest of this resistance zone is expected to catalyze a sharp response," Bitfinex analysts wrote in a market report published Monday. The $68,000 level also coincides with bitcoin's mid-June high, where the previous rally attempt rolled over and tumbled to fresh cycle lows.

The level sits near the average purchase price of investors who bought over the prior five months, according to Glassnode data cited by Bitfinex. Traders sitting on unrealized losses may see a return to breakeven as an exit opportunity. Bitcoin traded at $66,394 as of 14:30 UTC, up 1.6% in 24 hours, with 24-hour volume of roughly $33 billion, CoinGecko data shows.

A break above $68,000 could open the door to further gains, while a rejection risks retesting the $58,000 area. The Federal Reserve's July 28-29 meeting is the next macro catalyst, with CME FedWatch data showing an 87.7% probability of a rate hold.

Institutional flows stabilize, but conviction lags

U.S. spot bitcoin ETFs have drawn inflows for five straight sessions totaling more than $600 million, the most sustained institutional buying since mid-July and a reversal of the eight-week outflow streak that ran through late June. Still, demand has yet to fully recover, with flows remaining well below levels seen earlier this year, Bitfinex said.

K33 Research described the backdrop as a "promising, and typical, summer slumber." Head of research Vetle Lunde noted that CME bitcoin futures open interest has fallen to its lowest level since 2023, while 30-day spot trading volume is running at just 62% of its annual average. Average daily volume of roughly $2.3 billion is hovering near yearly lows even as prices recovered.

"Only about one-third of trading days have recorded net outflows this month, compared with roughly 90% in June," Lunde wrote, "suggesting selling pressure is easing, but buyers have yet to return in force."

Bitcoin's dominance has risen to nearly 67% of spot crypto trading volume, up from roughly 50% a year ago, according to Bitfinex. The shift suggests investors continue to favor bitcoin over smaller tokens, a sign that traders remain defensive rather than embracing broad risk-taking.

The rally has drawn support from a softer inflation backdrop. U.S. PPI fell 0.3% in June, the first monthly decline since August 2025, pushing Fed rate hike odds down to 12.3% from 31% a week earlier. Progress on the CLARITY Act has added a regulatory tailwind, with the White House agreeing to the ethics package that had stalled the bill.

Still, risks remain. Oil has pushed above $85 after President Donald Trump announced a Strait of Hormuz blockade, and a hotter energy print could stall the disinflation story. Higher oil and Treasury yields could keep the Fed hawkish and cap risk assets.

This article is for informational purposes only and does not constitute investment advice.