Bitcoin Surges 10% to $109,000 on U.S. Policy Hopes and Institutional Inflows

Bitcoin's price briefly surged above $109,000 on July 3, 2025, driven by anticipated U.S. policy changes and significant institutional inflows. This surge reflects optimism surrounding the proposed “BITCOIN Act,” which could allocate $100 billion to Bitcoin purchases, potentially transforming the financial landscape. The increase in Bitcoin's value was supported by a substantial influx of capital into the market, with open interest across major futures exchanges surging by 10%, or approximately $3.2 billion. This increase was primarily driven by long positions, indicating confidence in further upside.

The rally was not driven by excessive leverage, making the uptrend more sustainable. A notable short squeeze accompanied the move, with over $196 million in short positions liquidated within the past 12 hours. This liquidation cascade likely accelerated Bitcoin’s push past key resistance levels. Further validating the buy-side strength, the Bitcoin Coinbase Premium Index stayed elevated throughout the move, suggesting consistent spot buying pressure from institutional and retail investors.

The global money supply reaching a new all-time high also played a significant role in the rally. If Bitcoin closes the daily candle above $108,500, it will confirm a strong bullish engulfing pattern, increasing the likelihood of new highs. Market analysts are increasingly confident that a new all-time high is imminent. According to trader Rekt Capital, a record weekly close above $109,300 this Sunday could place BTC above its final major resistance zone, effectively “unlocking” price discovery and paving the way for new highs.

Adding to the bullish narrative, analyst Jackis highlighted that Bitcoin recently reached its lowest volatility levels since 2023, a rare occurrence seen only seven times in its history. “Every time we’ve hit these levels, a major volatility spike followed within five weeks, often sooner,” Jackis noted, suggesting a significant move is on the horizon. Meanwhile, technical analyst Titan of Crypto pointed to a confirmed bullish MACD crossover on the daily chart as a key momentum signal. The analyst added that BTC is attempting a breakout from a bullish flag pattern, with a successful push likely triggering a “magnet effect” toward the $137,000 region.

The surge in Bitcoin's price was also influenced by the US agreement with Vietnam and a rise in the global M2 money supply, which stirred a surge in its open interest. The cryptocurrency market's recovery was sharp, with Bitcoin's price reaching new highs amid cautious sentiment in derivatives markets. The rally was not driven by excessive leverage, making the uptrend more sustainable. The global money supply reaching a new all-time high also played a significant role in the rally, with market analysts increasingly confident that a new all-time high is imminent.

Although the short-term price increase saw Bitcoin briefly rise beyond $109,000, analysts predict further price discovery if the liquidity at the $112,000 level is breached. This event mirrors historical market patterns, though distinguished by proposed U.S. policy impacts and institutional investments. The immediate impacts were notable as trading volumes and institutional interest increased. Market analysts reported nearly 45% Bitcoin dominance, suggesting broad capital shifts. Proposed policy changes stirred market optimism, driving investment and aligning with the U.S. strategic reserve discussion. Investors' optimism about U.S. policies and volatility increased exposure to Bitcoin, reinforcing market resilience amidst regulatory anticipations.