Bitcoin gained over 7% in July 2026, while Ethereum surged nearly 20%, marking a sharp contrast to a brutal first half of the year. The rally came as chip stocks tumbled 22% and the Nasdaq 100 fell 9%, with the Federal Reserve keeping interest rates unchanged in late July. But traders and analysts warn the worst may not be over, pointing to historical August losses and forecasts that the bear market could stretch into October.
July's crypto rally
Bitcoin started July near $58,000 and hit a monthly high near $67,000 before settling around $64,000 — still about half its all-time high. Ethereum began the month near $1,500 and ended near $2,000, a strong recovery from its Q2 lows. Even so, Ethereum remains more than 50% lower than a year ago and roughly 61% below its August 2025 all-time high.
The gains stood out against a grim July for equities. The S&P 500 fell about 1%, the Russell 2000 dropped 3%, and the Nasdaq 100 lost 9%. Chip stocks were hit hardest, down 22%. Gold added 0.38% while silver slipped 2.64%.
Why the Fed matters
The Federal Reserve's decision to hold rates steady in late July offered no fresh catalyst for risk assets. With inflation still above target and the labor market tight, the central bank is in no rush to cut. That backdrop has kept pressure on growth stocks and crypto alike, even if July's price action told a different story for digital assets.
A brutal first half
Before July, 2026 had been punishing. Bitcoin fell over 10% in January, nearly 15% in February, 3.41% in May, and over 20% in June. Ethereum posted a Q1 return of -21.26% and a Q2 return of -25.28%. The two largest cryptocurrencies entered July deeply in the red, making the month's rebound more of a relief rally than a trend reversal.
What traders see ahead
Analyst Ali Martinez forecasts Bitcoin's bear market could last until October 2026. Traders Pepesso and Crypto Lens expect another move lower before a broader recovery begins in 2027. History doesn't offer much comfort either: every August since 2022 has ended with Bitcoin posting a monthly loss — -6.49% in 2025, -8.6% in 2024, -11.29% in 2023, and -13.88% in 2022.
Whether July's rally can hold into August is the open question. The Fed's next meeting is in September, and until then, traders are watching for a retest of June lows before any sustained uptrend takes hold.
