Bitcoin (BTC) currently has a bearish market sentiment after falling by 0.45 percent in the last 24 hours and 2 percent in the last seven days to trade at $26,998.15. Interestingly, the price has struggled to bounce back after pulling back from $30k. In the past few days, Bitcoin has traded between $26,800-$27,400.
Ethereum has also fallen by 0.78 percent in the last 24 hours and 1.76 in the last seven days to trade at $1,807.44. However, these prices could either bounce back or break another support level to trade lower as the US debt ceiling negotiation enters a critical stage.
Recently, Treasury Secretary Janet Yellen disclosed that the US is still projected to breach the debt ceiling as early as June 1. This means Congress would have to act swiftly in three weeks or record its first-ever debt default. The danger in this is that the US could fall into a recession
With additional information now available, I am writing to note that we still estimate that the Treasury will likely no longer be able to satisfy all of the government’s obligations if Congress has not acted to raise or suspend the debt limit by early June, and potentially as early as June 1.
House Speaker Kevin McCarthy and other Republicans criticized US President Joe Biden for planning to visit Papua New Guinea and also join the Quad summit in Australia as they face a possible default deadline
White House press secretary Karine Jean-Pierre commented:
Speaking at the White House celebration of Jewish Heritage Month, Biden admitted that there is work to do. According to him, the staff is going to continue its daily meetings to ensure that they do not default. McCarthy has also assured that it is possible to get a deal done by the end of the week
According to analysts, a resolution to this could potentially sustain Bitcoin. Joe DiPasquale, CEO of crypto fund manager BitBull Capital, has confirmed that the current macroeconomic situation is favorable for Bitcoin adoption. Speaking to reporters, DiPasquale further stated that the decision to raise the debt ceiling could force market participants to secure their wealth, hence, favoring risk assets
Lucas Outumuro, head of research at blockchain analytics firm IntoTheBlock has also observed that there could be a bid for Bitcoin regardless of the decision on the debt ceiling. According to him, the impact of this negotiation has some similarities with the ongoing banking crisis
They both highlight the weaknesses of the and create doubts about their long-term sustainability, thus creating demand for potential alternatives like crypto.
Bitcoin and Ethereum are currently bearish, and could either go as low as $25k or as high as $30k depending on how investors react to the final decision
