Bitcoin Navigates Fiscal Policy Tensions and Macro Headwinds

Bitcoin (BTC) is exhibiting resilience above the crucial $105,000 level as the market digests significant fiscal policy developments in Washington and braces for a pivotal week of macroeconomic data. As of recent trading, the BTC/USDT pair was priced at approximately $105,587, reflecting a modest 1.63% pullback over the last 24 hours. This price action follows a weekend where BTC briefly pushed towards $108,000, spurred by comments from former President Donald Trump regarding his proposed economic strategy. On Sunday, June 29, 2025, BTC traded as high as $108,489 before settling around $107,937 by 22:22 UTC, showcasing the market's sensitivity to geopolitical and fiscal narratives.

The catalyst for the weekend rally was a post on Truth Social where Trump addressed his party's internal debate over a massive tax-and-spending package. He urged fiscal conservatives not to be "too crazy" with cuts, promising that economic growth would more than compensate for any resulting deficits. "We will make it all up, times 10, with GROWTH," he stated. This rhetoric, signaling a tolerance for near-term deficit spending, was interpreted by many as bullish for hard assets. Crypto analyst Will Clemente reacted on X, questioning the appeal of long-term U.S. Treasuries in such an environment and highlighting the attractiveness of Bitcoin and gold as hedges against potential currency debasement and inflation. The market's reaction aligns with this view, as deficit-financed policies often weaken fiat currencies, pushing investors toward scarce assets like BTC.

Technical Levels and Key Macro Events to Watch

From a technical standpoint, Bitcoin established a key support zone around $107,300 over the weekend, with multiple bounces observed. Trading volume surged on June 29, confirming upward momentum during the initial push. However, recent data shows a retracement, with BTC/USDT finding a 24-hour low at $105,157. This level will be critical for traders to watch as a potential new support floor. The primary focus for the week ahead shifts to Federal Reserve Chairman Jerome Powell's semi-annual monetary policy testimony. Traders will be scrutinizing his language for any hints of a dovish pivot. As noted by Chris Weston, head of research at Pepperstone, emerging cracks in the labor market and weak housing activity could provide the Fed with reasons to guide towards a rate cut in September. Any dovish commentary from Powell could inject fresh liquidity into the markets and fuel another leg up for risk assets like Bitcoin.

Beyond Powell's testimony, the market is keenly awaiting Friday's release of the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge. The consensus forecast is for a mild 0.1% month-on-month increase, which would support the case for rate cuts. However, analysts at ING caution that the inflationary impact of potential tariffs, with a key deadline looming on July 9, may not be fully realized until later data releases. This uncertainty could lead to volatility. While geopolitical tensions in the Middle East have remained relatively contained, the potential for disruptions in the Strait of Hormuz remains a background risk that could spike oil prices and impact global inflation, further complicating the Fed's decisions and potentially bolstering the case for inflation hedges like Bitcoin. For now, the ETH/BTC pair shows altcoin weakness, trading down 1.81% at 0.02277, suggesting capital is consolidating into Bitcoin amid the macroeconomic uncertainty.