Yesterday, U.S. stock indices continued to hit new highs, and Bitcoin finally succeeded in challenging the $110,000 mark again. Although it is somewhat regrettable that it did not follow U.S. stocks to set new highs, it has managed to stabilize above the $109,000 level, turning the resistance position of the past two weeks into a support point. Although U.S. non-farm payrolls in June exceeded expectations and the unemployment rate unexpectedly fell, which is unfavorable for this month's interest rate cut narrative, the market has basically anticipated a high chance of an interest rate cut in September, thus driving the market up.
However, the momentum sustaining Bitcoin's rise currently comes not only from the expectation of U.S. interest rate cuts but also from reasons inherent to the cryptocurrency market itself. Looking at Coinglass's exchange contract funding rate chart, both Bitcoin and Ethereum are at relatively low levels, indicating that there are more open short positions than long positions on exchanges. Additionally, the number of open contracts is close to yearly highs, so if these short positions have not been reduced or liquidated, there is still some room for the cryptocurrency market to rise.
Since today is the U.S. Independence Day holiday, U.S. stocks will close early at 1 PM on Thursday U.S. time and enter a weekend break. Additionally, Trump's large and beautiful policy has also successfully passed, temporarily alleviating a short-term negative factor, so it is expected that there will not be significant turbulence in the market. Next week, July 9, is the deadline for the U.S. to implement the tariff suspension measures, and currently, this event is the only thing that can affect market trends. However, it seems that there are no significant roadblocks at the moment, so we can temporarily expect the market's upward momentum to continue.
However, there will be some strong fluctuations in the near future.
Despite Bitcoin briefly breaking the $110,000 threshold, after Trump signed the recently passed economic bill, the price of Bitcoin may still temporarily decline.
The bill includes tax cuts and an increase in the debt ceiling, which is expected to lead to a new round of large-scale borrowing by the U.S. Treasury—potentially reducing the liquidity of risk assets such as Bitcoin.
The Treasury's move to supplement cash reserves may temporarily deplete system funds, thereby exerting short-term downward pressure on cryptocurrencies. However, this is only a temporary pause, not a reversal. The bull market cycle continues, and as the market gradually adapts to the influx of new debt, Bitcoin is expected to maintain its upward momentum.
In addition to market fundamentals, there is an increasing integration between cryptocurrencies and U.S. fiscal policy. Stablecoins may become an important tool for the government, used by major banks to absorb government bonds as part of a strategy to manage government debt overall.
In this context, the control over the issuance of stablecoins may shift from private companies to regulated financial institutions.
Recently, it is necessary to be prepared for short-term fluctuations, but I remain confident in the long-term trend of Bitcoin.