Bitcoin Tests $109,000 as US Fiscal Policy Sparks Inflation Hedge Demand

Bitcoin (BTC) is experiencing a surge in bullish sentiment, pushing its price towards the $109,000 mark as traders react to significant developments in United States fiscal policy. The market's focus has intensified following a pivotal statement from former President Donald Trump and the narrow passage of a massive budget bill in the Senate. As of the latest data, BTCUSDT was trading at approximately $108,968, reflecting a market that is increasingly viewing the premier cryptocurrency as a primary hedge against potential inflation and currency debasement. The recent price action saw BTC fluctuate within a tight but volatile range, trading between a low of $108,532 and a high of $110,493 over the past 24 hours. This price movement comes on the heels of Trump’s message on Truth Social, where he urged Republican lawmakers to embrace a growth-centric economic model to offset deficits, a stance that many investors interpret as a signal for continued loose fiscal policy. According to crypto analyst Will Clemente, this policy direction makes holding long-term U.S. treasuries unattractive while strengthening the case for assets like Bitcoin and gold.

The legislative backdrop adds another layer of complexity and opportunity for traders. While the digital asset industry faced a minor setback as Senator Cynthia Lummis's proposed amendment to ease crypto taxation was not included in the final Senate bill, the macro implications of the bill itself have overshadowed this development. The legislation, which passed on a razor-thin 50-50 vote broken by the Vice President, proposes an estimated $3.8 trillion in tax cuts. Nonpartisan analysts project this could add trillions to the national debt. This prospect of significant deficit spending is the primary driver behind the renewed interest in hard assets. Investors are preemptively positioning themselves for an environment where the government's fiscal policies could lead to a devaluation of the U.S. dollar. The market narrative, therefore, is less about short-term regulatory wins and more about the long-term structural integrity of the fiat system, a fundamental tenet of the Bitcoin investment thesis.

BTC Technicals and Altcoin Divergence

A closer look at the technicals for Bitcoin reveals a market defined by clear support and resistance zones. Intraday analysis from June 28 to June 29 shows that BTC established a firm support base around the $107,300 level, successfully rebounding from this price point on multiple occasions. Upward momentum was confirmed by a significant volume spike, with trading volume reaching 7,538 BTC during a key three-hour window on June 29. However, resistance is also apparent. After rallying toward the 24-hour high near $110,500, the price faced selling pressure. In the final hours of the session, a descending channel formed as BTC fell from $108,219 to $108,059, indicating profit-taking near the upper end of the range. A notable volume spike of 130 BTC at 13:35 UTC coincided with a dip to $108,030, which was tested and held, suggesting buyers are still active on pullbacks. For traders, the key levels to watch are the $107,300 support and the $110,500 resistance. A sustained break above this resistance could signal the next leg up.

The broader cryptocurrency market shows a clear divergence, with capital appearing to flow into BTC at the expense of many altcoins. The ETH/BTC pair, a key indicator of market sentiment, has declined by 1.23% to 0.0233, suggesting Bitcoin is outperforming Ethereum. This is further reflected in their USD pairings, where ETHUSDT is down 1.3% to $2,551, while BTC holds its ground. Other major altcoins like Cardano (ADA) and Solana (SOL) are also showing weakness against Bitcoin, with ADABTC down 2.57% and SOLBTC down 1.99%. However, there are pockets of strength. Avalanche (AVAX) has been a standout performer, with the AVAXBTC pair surging an impressive 6.73% to 0.0002267. Litecoin (LTCBTC) and Dogecoin (DOGEBTC) also posted modest gains of 1.69% and 1.84% respectively. This market dynamic suggests a flight to quality within the crypto space, where investors prioritize Bitcoin as the primary store-of-value asset amid macroeconomic uncertainty, while selectively allocating capital to a few altcoins with strong individual narratives.