Bitcoin reclaims US$28,000 on US debt ceiling talks

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Bit­coin moved back above US$28,000 in Mon­day morn­ing trad­ing in Asia, lead­ing a ral­ly among all top 10 non-sta­ble­coin cryp­tocur­ren­cies. Ethereum also reclaimed the US$1,900 resis­tance lev­el. The surge in cryp­tocur­ren­cies fol­lowed an in-prin­ci­ple agree­ment between Pres­i­dent Joe Biden and House Speak­er Kevin Mccarthy to raise the country’s debt ceil­ing. The move has boost­ed investors’ appetite for risk assets. Mean­while, U.S. equi­ty futures rose Fri­day, with fur­ther pos­i­tive sen­ti­ment over the week­end fol­low­ing in-prin­ci­pal agree­ment on U.S debt talks.

Crypto

Bit­coin rose 3.98% over the last 24 hours to US$28,195 at 9:30 a.m. in Hong Kong. It record­ed a week­ly gain of 5.73%, accord­ing to data from Coin­Mar­ket­Cap. The world’s largest cryp­tocur­ren­cy is trad­ing above the US$28,000 resis­tance lev­el for the first time since May 10.

Ether also jumped 3.48% in the past 24 hours to US$1,916, mov­ing up 6.53% over the past sev­en days. It was trad­ing above the US$1,900 mark for the first time in three weeks.

Cryp­tocur­ren­cy prices received a boost from U.S. debt ceil­ing talks. 

U.S. Pres­i­dent Biden announced Sat­ur­day that he had reached an in-prin­ci­ple bud­get agree­ment with House Speak­er Kevin McCarthy. If rat­i­fied, the agree­ment would sus­pend the government’s debt lim­it through Jan. 1, 2025. 

Both par­ties are now urg­ing U.S. Con­gress to pass the deal by June 5 – the debt default dead­line set by Trea­sury Sec­re­tary Janet Yellen. If an agree­ment is not rat­i­fied by that date, the gov­ern­ment would no longer be able to pay its debts. Such an out­come would prove dev­as­tat­ing for U.S. and glob­al markets.

The sense of relief among investors that a deal is on the verge of com­ple­tion has led to “fresh buy­ing of risk assets,” said Markus Thie­len, Head of Cryp­to Research & Strat­e­gy at dig­i­tal asset ser­vice plat­form Matrix­port, in a note shared with Forkast

“So many investors were scared about the debt ceil­ing and the poten­tial default by the U.S. gov­ern­ment – which is just so unlike­ly. Now, they need to find some­thing else to be bear­ish about while the mar­ket like­ly ral­lies,” said Thielen.

With Bit­coin tak­ing the lead, all oth­er top 10 non-sta­ble­coin cryp­tocur­ren­cies trad­ed high­er over the past 24 hours. The total mar­ket cap for cryp­tocur­ren­cies rose 3.00% in that peri­od to US$1.17 tril­lion. The 24-hour trad­ing vol­ume also jumped 57.01% to US$31.73 billion.

Neo, the token that sup­ports Chi­na-affil­i­at­ed Neo blockchain, saw the largest week­ly gain in the top 100 cryp­tocur­ren­cies. It rose 23.83% to US$11.37. Neo is backed by Onchain, a Chi­nese blockchain com­pa­ny and mem­ber of the country’s inter­net finance indus­try lobby.

Neo out­per­formed most oth­er larg­er-cap cryp­tocur­ren­cies in the past week with investors now “posi­tion­ing them­selves for the Hong Kong open­ing event,” said Thie­len of Matrixport.

The spe­cial admin­is­tra­tive region of Chi­na will unlock trad­ing for retail investors from June 1, as the city seeks to become a hub for the cryp­to industry.

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