Bitcoin Is Rising but No Debt-Ceiling Deal Is Risk for Cryptocurrencies — Barrons.com

By Jack Denton

Bitcoin and other cryptocurrencies turned higher Tuesday but continued to languish below key levels amid a correction from April’s recent peak for digital asset prices. A deal to raise the U.S. debt ceiling remains elusive and has created uncertainty for crypto traders.

The price of Bitcoin has risen 2% over the past 24 hours to $27,325. The largest digital asset remains stuck in a zone between $26,500 and $27,500, which has held for much of the past two weeks and represents one of the tightest trading ranges for Bitcoin’s price in years. While Bitcoin remains up by some two-thirds so far this year, it failed to hold April’s peak above $30,000 — the highest levels since June 2022 — with traders eyeing multiple catalysts against the backdrop of brewing volatility.

“Bitcoin has stabilized over the past week above important support near $25,200. Short-term momentum remains to the downside, however, suggesting the correction will keep hold,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “Intermediate-term momentum is still positive but has waned … Bitcoin remains challenged long-term given the downtrending weekly [indicators].”

Among the developing catalysts that traders have been monitoring are the U.S. macroeconomic picture, including the pathway for interest rates and a risk of default if the U.S. debt ceiling isn’t raised. Both forces similarly impact the stock market and have seen Bitcoin trade in step with the Dow Jones Industrial Average and S&P 500. In particular, the prospect of a U.S. debt default looms large as a major brake on momentum for risk-sensitive assets.

“The risk of default is very small but if it were to happen that could feel like an uppercut to risk appetite which would send cryptos sharply lower,” said Edward Moya, an analyst at broker Oanda. “Bitcoin appears content to trade near the lower boundaries of its recent trading range between $26,500 and $30,000 … Crypto traders are not sure how Bitcoin will behave throughout the next several days of debt ceiling negotiations.”

Beyond Bitcoin, Ether — the second-largest crypto — gained 2% to $1,850. Smaller cryptos or altcoins also were higher, with Cardano up less than 1% and Polygon popping 3%. Memecoins also rose, with Dogecoin and Shiba Inu each rising 2%.

Write to Jack Denton at jack.denton@barrons.com

This content was created by Barron’s, which is operated by Dow Jones & Co. Barron’s is published independently from Dow Jones Newswires and The Wall Street Journal.© 2023 Dow Jones & Company, Inc. All rights reserved.


Thank you for taking the time to read. If you want to support these posts, you can do so by bookmarking this link. Your support enables me to bring you amazing information and content each and everyday. Information you're not going to get anywhere else. It takes hours of study each day and several hours to produce and process the content.

Add comment

Follow us

Don't be shy, get in touch. We love meeting interesting people and making new friends.

Most popular

Most discussed