Bitcoin (BTC) is currently trading within a tight range after a strong rally last week, as traders remain cautious ahead of key upcoming macroeconomic developments.
Reports indicate that the deadline for US President Donald Trump’s “One Big Beautiful Bill” falls on Friday, while the temporary suspension of tariffs ends in early July, potentially adding a new layer of uncertainty to the market.
This caution was reflected in data from bitcoin exchange-traded funds (ETFs), which saw over $340 million in outflows on Tuesday, ending a 15-day streak of positive inflows since June 9.
As of 12:29 GMT, bitcoin rose 1.2% to $107,800 on CoinMarketCap.
Traders Cut Risk Amid Trade Uncertainty
A report by K33 on Tuesday noted that bitcoin remained in an exceptionally tight range throughout the week, with 7-day volatility falling to 0.79%, the lowest weekly volatility recorded since October 14, 2023, according to the chart included in the report.
Last week’s ceasefire between Iran and Israel triggered a rally that pushed bitcoin up by more than 7%, closing above $108,000. However, the rally stalled, and bitcoin retreated below $106,000 on Tuesday as political discussion resurfaced around Trump’s budget bill and related tariff debates.
The US Senate passed the “One Big Beautiful Bill” on Tuesday with a narrow 51-50 vote. The bill now heads to the House, as Trump seeks to finalize his budget by Friday. Additionally, the suspension of tariffs is scheduled to expire on July 9. Both events could impact bitcoin depending on whether expansive fiscal policy or trade uncertainty prevails.
Besides the bill and the tariff deadline, low liquidity due to the US Independence Day holiday on July 4 may further add to market uncertainty, prompting traders to reduce risk exposure.
Important US economic data is also expected this week, most notably the non-farm payrolls (NFP) report on Thursday, which could once again influence market expectations on the interest rate path.
Early Signs of Weakening Institutional Demand for Bitcoin
New data is showing early signs of weakening institutional demand for bitcoin. According to SoSoValue, US bitcoin ETFs posted $342.25 million in outflows on Tuesday, the highest level of withdrawals since May 30. This also ended a streak of positive inflows that began on June 9. If institutional outflows persist, they could lead to further downside in bitcoin prices.
In a related development, Arizona’s bitcoin reserve bill (HB2324) was revived last month. The bill aims to establish a fund of digital assets confiscated in criminal cases. However, it failed to become law after being vetoed by Governor Katie Hobbs on Tuesday.
Hobbs justified her decision by arguing the bill might discourage local law enforcement from cooperating with state authorities on digital asset seizures.
Bitwise: Bitcoin to Reach $136,000 in July for Three Reasons
Bitwise Asset Management said bitcoin could climb to $136,000 in July for three reasons.
In a report issued Tuesday, the firm stated that bitcoin could overcome its typical summer stagnation and post a 30% surge this month.
First, bitcoin historically gains after geopolitical tensions such as the recent conflict involving the US, Israel, and Iran.
Second, institutions are purchasing more bitcoin than miners are bringing to market.
Third, global interest rate cuts are injecting liquidity into markets, creating a supportive environment for bitcoin and the broader crypto space.
Analysts Andrei Dragos and Ayush Tripathi from Bitwise wrote: “These favorable factors create a constructive backdrop for bitcoin and digital assets as we enter July.”
