The largest trade agreement ever - 5 things to know about Bitcoin this week

Bitcoin approaches the end of July with a target of 120,000 dollars as the price recovery momentum is held steady.

The price movement of BTC is causing investors to hope for a return to the historical peak, but the risk of a correction down to 113,000 dollars still exists.

An important week with a series of macro data from the US combined with the Federal Reserve (Fed) meeting on interest rates, putting pressure on Chairman Jerome Powell.

The US-EU trade agreement immediately boosts risk assets, including the record opening of S&P 500 futures.

The performance of Bitcoin in July 2025 could be impressive, but it still needs more to stand out when compared to historical milestones.

Stablecoin liquidity suggests that the bulls may need to wait longer before gaining enough momentum to enter a new price discovery phase.

The Bitcoin bull is aiming for the $120,000 mark

A price surge over the weekend brought Bitcoin close to the $120,000 mark, but the momentum ultimately could not be sustained.

BTC 1 Hour Chart | Source: TradingViewNevertheless, BTC still holds around the $118,000 level, making investors optimistic that the price will continue to rise in the near future.

"If Bitcoin can narrow its volatility and hold above $117,000, then I think we will soon have a new ATH," trader Crypto Tony predicted in a post on X on Monday.

Weekly BTC perpetual contract chart | Source: Crypto TonyTrader and Rekt Capital analysis indicates Bitcoin has "activated" a bull flag pattern after closing the week at $119,450.

"In that case, turning the ~119,200 USD area into support through a reset ( could even happen with just one candle wick ) next week. However, currently BTC needs to avoid creating a wick that exceeds the resistance at the top of the bullish flag, otherwise the price will continue to remain within the range," he shared along with an illustrative chart.

BTC Price Chart 1 Week | Source: Rekt CapitalThe order book on the exchange shows two important areas above and below the current price level, so the possibility of bouncing back to the $113,000 mark is entirely feasible.

"For BTC, there are currently about 58.7% Long orders compared to 41.3% Short orders. This means that if the Short orders are liquidated, the market will have enough "fuel" to bounce back, but not so much as to signal an imminent squeeze. The market is balanced enough to continue to oscillate until one side truly commits to action," analyst TheKingfisher commented while analyzing liquidation data.

BTC Liquidation Map | Source: CoinGlassThe latest data from the tracking platform CoinGlass shows the bid liquidity allocated at different price levels ranging from 116,800 to 118,300 dollars.

FOMC meeting week kicks off, all eyes are on Chairman Powell

If most of July was relatively quiet in terms of macroeconomic data from the US, then everything is about to change.

The Fed's decision on interest rates will be the highlight in the coming days, but it is not the only concern for risk asset traders.

The GDP report for Q2 will be released just a few hours before the meeting of the Federal Open Market Committee (FOMC) on Wednesday. The following day, the inflation index that the Fed "prioritizes" monitoring — the Personal Consumption Expenditures Index (PCE) — will also be released.

"We are facing a week full of events," the market analysis account The Kobeissi Letter wrote on X.

Kobeissi further stated that the corporate earnings season is still ongoing, creating "the busiest data week of the year."

This data appears at a crucial time for the market. The growing divergence in views between government expectations and Fed policy is gradually being exposed to the public, as U.S. President Donald Trump continuously calls on Fed Chairman Jerome Powell to cut interest rates.

However, Powell still maintains a "hawkish" stance throughout 2025 as inflation data continues to show a mixed picture — consumer costs are cooling but the labor market remains strong — allowing the Fed to maintain its current policy.

The latest data from the FedWatch Tool of CME Group confirms that the market almost does not expect any rate cuts in this week's FOMC meeting, with most predictions still leaning towards the meeting in September.

The target probability of the Fed's interest rate for the July FOMC meeting | Source: CME Group "While the July meeting is widely expected to result in no change in interest rates, investors will be looking for signs of potential rate cuts in the remaining meetings of the year. Concerns about inflation will continue to be a constraining factor on the outlook, as evidenced by the impact of tariffs on the latest Consumer Price Index (CPI) report," confirmed brokerage firm Mosaic Asset in their latest publication of the regular newsletter The Market Mosaic.

Mosaic refers to the higher-than-expected CPI for June.

The progress of the US trade agreement drives a wave of buying into risky assets

Balancing the diverse volatility risks from macroeconomic data is good news for the market in general: the US has signed trade agreements with the EU and Japan, while also delaying the imposition of tariffs on China for an additional 90 days.

These important events immediately impact market sentiment and the performance of risk assets.

U.S. stock futures surged, with the S&P 500 opening above the 6,400 mark for the first time in history thanks to announcements about a trade deal.

S&P 500 Futures Chart 1 Day | Source: TradingViewBoth Trump and European Commission President Ursula Von Der Leyen referred to this outcome as the "largest trade deal ever," with Ms. Von Der Leyen emphasizing that the US and the EU account for 44% of global GDP.

"Concerns about trade tensions have eased alongside abundant liquidity, pushing the S&P 500 to a new record high, while volatility has dropped to its lowest level since the beginning of the year," Mosaic Asset commented on this trade theme.

Mosaic also stated that the economic context in the US is supporting the growth of risk assets. Specifically, they emphasized that M2, a "broad measure of the money supply in the US," has increased by 4.5% compared to the same period last year.

"M2 has hit bottom and started to bounce back since 2023, currently establishing a new record high along with major stock indices," Mosaic noted.

BTC 1-day chart and global M2 liquidity | Source: TradingViewAs reported, the performance of Bitcoin and the crypto market has always been closely related to the trend of global M2 liquidity.

Does this July resemble the previous Julys of Bitcoin?

At around 120,000 dollars, Bitcoin definitely provides profits for the bulls this month, but historically, July tends to perform better.

Data from CoinGlass shows that although BTC increased by 11.3% in July 2025, this figure is only slightly above the average over the past 12 years.

Since 2013, July has recorded an average increase of 7.85% and a median increase of 9.6%.

Even in 2022 – the most recent bear market year for Bitcoin, July still brought a nearly 17% increase, according to confirmation from CoinGlass.

Monthly profit of BTC | Source: CoinGlassAnother comparative chart shared by network economist Timothy Peterson on X on Sunday highlighted the current situation.

Source: Timothy PetersonBefore the end of the monthly candle, trader and analyst Aksel Kibar emphasized that the bulls need to hold the early July gains.

"The breakout in the first week of July was accompanied by a long white candle. The important thing is not to lose those profits during the correction. This will indicate a positive momentum. So far, the price has held well above the horizontal support area at $109,000," he shared along with a chart with a target of $141,300.

BTC price chart 1 week | Source: Aksel KibarThe average profit in August for BTC was not impressive, only at 1.75%.

Stablecoin liquidity raises many questions

Those who expect Bitcoin to continue its rapid rise may have to wait a little longer.

A new study from the on-chain analytics platform CryptoQuant points out a factor that often hinders the price increase of BTC until it is resolved.

The supply ratio of stablecoin (SSR) is increasing in line with the price of BTC, which may signal a shortage of stablecoin liquidity, also known as "willingness to buy" for investment.

"The increase in this index indicates that the amount of stablecoin is less compared to the volume of Bitcoin. In other words, liquidity is weak and the market lacks strong buying power to support Bitcoin. The index rising along with the price of Bitcoin shows that this upward trend is happening without the corresponding addition of new stablecoins. If the index continues to rise, it could signal that the buying momentum will weaken in the future due to low liquidity," explained Arab Chain contributor in a Quicktake blog post by CryptoQuant on Monday.

SSR Bitcoin chart and BTC price | Source: CryptoQuantThe SSR index reached an all-time high recently in November 2024, a level that was nearly surpassed on July 14.

Therefore, Arab Chain argues that the market may be entering a "temporary saturation" phase.

"This indicates that the market is still partially supported by liquidity, but for Bitcoin to continue its growth, stablecoin reserves need to increase significantly in the coming days," Arab Chain concluded.

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