Bitcoin has absorbed a wave of negative developments in July and managed to maintain its monthly gains, though traders remain cautious as concerns over monetary policy and upcoming economic data continue to influence sentiment.

The world’s largest cryptocurrency is finishing the month on stronger footing than many market participants expected.

BTC briefly dropped below $63,000 on Friday, sliding around 3% during the session. However, looking at the broader monthly performance, Bitcoin is still set to close July with a gain of approximately 7.5% despite facing multiple challenges.

The month brought several sources of pressure, including increasing expectations of a possible Federal Reserve rate hike, rising bond yields, a sharp pullback in AI-related investments, and a major security breach involving Coldcard, a widely used Bitcoin hardware wallet provider.

Even with these obstacles, Bitcoin avoided a deeper decline and remained above key bear market levels, showing greater resilience than many other risk assets as investor appetite weakened.

Bitcoin Benefits From Reduced Leverage

According to Bitfinex analysts, Bitcoin’s ability to withstand recent volatility is partly due to healthier market positioning.

They explained that crypto markets entered the Fed meeting with significantly less leverage than equities because many leveraged positions had already been cleared during the late-June selloff, which pushed Bitcoin below $58,000 on July 1.

Since that period, daily liquidation activity has stayed well below the typical $400 million to $500 million range seen earlier this year. This suggests that the market has experienced limited forced selling despite ongoing macroeconomic uncertainty.

Bitfinex analysts said crypto markets held up better than leveraged equity sectors because much of the liquidation pressure had already been exhausted.

Coldcard Vulnerability Adds Security Pressure

Bitcoin’s recent performance has also unfolded alongside concerns surrounding a major Coldcard exploit that resulted in at least $38 million worth of BTC being stolen.

While the incident has not caused a significant market downturn, it has reignited concerns about the risks associated with self-custody and highlighted the challenges of securing digital assets independently.

Paul Howard, director at trading firm Wincent, said the stolen Bitcoin has not yet entered the market, but potential selling could create short-term pressure on prices. He added that the exploit demonstrates the operational risks that remain part of self-custody systems.

August Outlook Depends on Fed Signals and ETF Demand

As investors look toward August, macroeconomic uncertainty remains the key focus.

Jeff Anderson, managing partner at STS Digital, said markets may be moving into a new phase of volatility as investors adjust between expectations of rate cuts, unchanged policy, and possible rate increases. He noted that this uncertainty could continue affecting risk assets such as Bitcoin until the economic outlook becomes clearer.

Bitfinex analysts expect traders to maintain a defensive stance ahead of the upcoming U.S. jobs report, which will be the next major market-moving event after the Federal Reserve meeting.

They said the main question is whether spot Bitcoin ETF inflows will recover once investors have greater visibility into the Fed’s future policy path.

The analysts added that stronger institutional buying activity would be an important indicator for traders watching Bitcoin’s next move.

Lacie Zhang, research analyst at Bitget Wallet, said Bitcoin could face a volatile and range-bound August unless real yields decline or ETF inflows return consistently.

She warned that while markets can tolerate a neutral Fed outlook, a combination of a stronger dollar, rising real yields, and weak ETF demand could create additional pressure on Bitcoin.