Bitcoin Surges 10% to $110,000 on Political and Economic Factors

Early July saw Bitcoin (BTC) surge above $110,000, driven by a confluence of political and economic factors. The second-largest short wipe-out of the year, amounting to over $110 million in liquidated bearish positions, contributed to this surge. This liquidation often leads to "forced buys," converting bearish leverage into spot demand, which has bulls targeting the $112,000–$116,000 range.

The political backdrop is equally significant. The "One Big Beautiful Bill," a monumental piece of legislation valued at approximately $3.3 trillion, is on its way to the President's desk. This bill includes tax cuts, military spending, and border-security outlays, offset by deep cuts to healthcare and green-energy programs. Notably, sections within the bill direct the Treasury to modernize payment laws and form a U.S. Strategic Bitcoin Reserve, which could have a bullish impact on Bitcoin's price.

Elon Musk's public opposition to the bill adds another layer of complexity. Musk has criticized the bill as "utterly insane and destructive," warning of potential job losses and a ballooning deficit. His stance could delay or soften the bill's climate rollback sections, which are crucial for Ethereum-linked sustainability tokens.

The U.S. has also lifted restrictions on exporting advanced chip-design software to China, a move that benefits companies behind Bitcoin mining infrastructure. This rollback lowers the risk of supply-chain disruptions and helps keep mining costs stable, which is bullish for Bitcoin’s long-term price sustainability.

Adding to the political turmoil, President Trump has called for the resignation of Federal Reserve Chair Jerome Powell, accusing him of hurting the economy. A possible Powell resignation could signal a shift toward lower interest rates and looser monetary policy, both of which are bullish for crypto markets. If Powell exits and a pro-crypto or dovish replacement is named, it could drive sharp upside for BTC and ETH.

Despite Bitcoin's dominance, Ethereum (ETH) is trading flat around $2,600. However, momentum may build as Trump Media's dual Bitcoin-Ethereum ETF filing progresses. The proposed structure allocates 75% to BTC and 25% to ETH, potentially driving institutional capital flows into Ethereum once approved. If Powell exits or if the ETF gets greenlit, ETH could ride a second wave that narrows the BTC/ETH performance gap.

Analysts predict that Bitcoin could reach $120,000 by mid-July, driven by the passage of legislation and institutional flows. By the end of July, the price could surge to $128,000 if Powell resigns and ETF hype continues. Support for BTC lies around $107,000, with $103,000 as a deeper level. Invalidation below $101,000 signals a false breakout.

For Ethereum, short-term targets are set at $2,650–$2,850, following BTC strength. By mid-July, the price could reach $3,200 as the ETF decision window opens. By the end of July, the price could hit $3,500 if Powell exits, the ETF is approved, and fresh inflows enter the market. Breaking above $2,950 could ignite rapid movement up to the $3,200 region.

In conclusion, Bitcoin’s breakout above $110,000 is not just a technical story but a geopolitical trade on legislation, central banking, and global cooperation. If the bill is signed and Powell steps aside, the market could enter a "risk-on" mode, driving BTC toward $120,000 this July. Ethereum, while lagging today, is well-positioned to follow, especially with a dual-asset ETF and shifting monetary policy on the horizon. July could be the month politics propels crypto to its next milestone.