Bitcoin faced a decline on Tuesday as investor sentiment waned due to escalating uncertainties surrounding U.S. trade policies and a contentious tax and spending bill proposed by President Trump. The broader cryptocurrency market struggled to keep pace with equities, demonstrating tepid performance.

As of 09:11 ET, Bitcoin traded down 0.8% at $106,670, marking its second consecutive loss.

Profit-Taking and Fiscal Jitters Weighing Down Bitcoin

The recent downturn in Bitcoin’s value followed a sharp rally throughout June, where it significantly outperformed other digital assets. The ongoing weakness is attributed to investor profit-taking alongside broader concerns over macroeconomic instability and geopolitical risks.

This dip occurred despite additional accumulation from major corporate holders, including:

• Strategy, formerly known as MicroStrategy, investing over $500 million in Bitcoin.

• Japan’s Metaplanet Inc purchasing another $108 million worth of Bitcoin.

Despite this corporate enthusiasm, bearish momentum persists, indicating that current market-wide risk aversion is overshadowing institutional interest.

Focus on Trade: Countdown to July 9

Global markets are increasingly attentive to the approaching July 9 deadline for trade agreements with the U.S. President Trump warned that non-compliant nations could face tariffs ranging from 20% to 50%, placing further pressure on Bitcoin and other risk-sensitive assets.

While negotiations with Canada have restarted after the withdrawal of its digital services tax, tensions with Japan remain high as Trump accuses Tokyo of failing to import U.S. rice, hinting at a potential breakdown in trade talks.

Fiscal Dangers Emerge with Trump’s Proposed Spending Bill

Adding to market pressures, debates in Congress over a significant tax and spending reduction bill are ongoing. Preliminary estimates indicate that this legislation could increase federal debt by $3.3 trillion over the next decade, exacerbating concerns as U.S. debt already surpasses $36 trillion.

While perceived by some as a hedge against monetary instability, rising debt levels and uncertainty surrounding fiscal policies make many investors cautious about Bitcoin.

Conclusion:

Bitcoin’s recent decline emphasizes a shift in investor psychology due to trade tensions, fiscal uncertainties, and profit realization following a robust rally. While corporate investments continue to support Bitcoin in the long run, volatility is likely to persist as traders anticipate updates on the July 9 trade deadline and U.S. fiscal policies.