The cryptocurrency market is closely monitoring significant developments from Washington, where fiscal policy debates and regulatory proposals are creating both opportunities and uncertainty for traders. Bitcoin (BTC) experienced a notable uptick, trading around $107,937, as market participants digested President Donald Trump's commentary on economic growth offsetting deficits. This statement has amplified the bullish case for hard assets like Bitcoin and gold, positioning them as potential hedges against inflationary fiscal policies. Simultaneously, a pivotal legislative effort by U.S. Senator Cynthia Lummis aims to simplify cryptocurrency taxation, potentially removing major barriers to mainstream adoption.

US Fiscal Policy and Crypto Regulation Drive Market Sentiment

The market's recent price action is heavily influenced by the political maneuvering surrounding a massive budget bill. On June 29, 2025, President Trump addressed fiscal conservatives within his party via a Truth Social post, stating, “We will make it all up, times 10, with GROWTH, more than ever before.” This supply-side economic approach suggests a tolerance for near-term deficit spending, a scenario that often leads investors to seek refuge in scarce, non-sovereign assets. Crypto analyst Will Clemente captured this sentiment, questioning the appeal of long-term U.S. Treasuries and highlighting the logic of holding Bitcoin or gold in such an environment. The implication for traders is clear: fiscal policies that risk currency debasement could fuel sustained demand for BTC, making it a crucial component of a diversified portfolio aimed at wealth preservation.

Senator Lummis Proposes Key Crypto Tax Reforms

Adding another layer of intrigue, Senator Cynthia Lummis is championing an amendment to the budget bill that could fundamentally alter the U.S. crypto tax landscape. The proposal includes a de minimis exemption, waiving capital gains taxes on crypto transactions under $300, with an annual cap of $5,000. This could significantly reduce the complexity for casual users and encourage wider participation. More critically for the industry's core functions, the amendment seeks to change how rewards from staking and mining are taxed. Currently, these rewards are taxed upon receipt and again upon sale. The proposed change, supported by lobbying groups like the Digital Chamber, would align the tax treatment with actual income realization by only taxing the assets when they are sold. This would rationalize the tax code for validators and miners, treating their created assets like other forms of property, such as crops or minerals, which are typically taxed at the point of sale. The amendment also aims to close the wash-sale loophole for crypto, a move that would bring digital asset trading rules more in line with traditional securities.

Bitcoin (BTC) Price Analysis: Navigating Fiscal Uncertainty

In response to these developments, Bitcoin's price exhibited volatility. Over a 24-hour period leading up to 22:22 UTC on Sunday, BTC fluctuated between $107,194 and an intraday high of $108,489. Technical analysis models show that support was firmly established near the $107,300 level, which was tested and held multiple times. Trading volume provided confirmation of the bullish sentiment, peaking at 7,538 BTC in a three-hour window on June 29, coinciding with the market absorbing the fiscal policy news. Despite a slight pullback to $107,110.70 in later trading, the broader structure remains constructive. The key resistance level for traders to watch is the recent high around $108,750. A decisive break above this level could signal a continuation of the uptrend, while a failure to hold the $106,700 support zone could invite further consolidation.

While Bitcoin captured the spotlight, the altcoin market showed mixed but interesting signals. The ETH/BTC pair saw a modest gain of 0.738%, trading at 0.02322 BTC, indicating that Ethereum was holding its ground but not outperforming Bitcoin significantly. However, other layer-1 tokens displayed notable strength. Avalanche (AVAX) surged against Bitcoin, with the AVAX/BTC pair climbing an impressive 6.73% to 0.00022670 BTC on strong volume. Similarly, Solana (SOL) showed relative strength, with the SOL/BTC pair rising 3.637% to 0.00144770 BTC. This divergence suggests that while the macro narrative is currently a primary driver for Bitcoin, traders are also selectively rotating capital into altcoins with strong fundamentals or upcoming catalysts. Traders should monitor these key BTC pairs for signs of a broader altcoin season or a flight back to the safety of Bitcoin.