U.S. Debt Ceiling Influence: Bitcoin Seeks to Regain $28,000

  • According to Javier Molina, senior market analyst at eToro, from a technical standpoint, there is still pressure on the initial support range between $26,500 and $26,800.
  • Molina suggests that the buying pressure has thus far prevented bearish attacks at the 25,800 mark.

The resurgence in the cryptocurrency market

With Bitcoin (BTC) experiencing a 3% increase in the past 24 hours and edging closer to reclaiming the $28,000 level. Similarly, Ethereum (ETH) has seen a substantial surge of approximately 3%, attempting to solidify its position above the $1,900 level, which hasn’t been seen since the beginning of May.

According to Javier Molina, senior market analyst at eToro, from a technical standpoint, there is still pressure on the initial support range between $26,500 and $26,800. Despite witnessing occasional price drops below this zone, Molina suggests that the buying pressure has thus far prevented bearish attacks at the 25,800 mark.

Molina further comments that in order to anticipate a more significant rebound, surpassing the $26,800 level and consolidating above $27,500 is necessary. The critical upside zone is identified at 28,500 points, and if the $26,500 level is breached, the key technical support level would be $25,000.

The revival of digital assets has been prompted, much like most recent market movements, by the resolution of the U.S debt ceiling issue. On Sunday, President Joe Biden and Republican House Speaker Kevin McCarthy announced a mutual understanding to resolve the situation, averting a potential historic default that could have occurred in early June. However, the agreement still requires ratification by both houses of Congress.

The agreement entails significant spending cuts, reinforced work requirements for public aid programs, and the rescission of unused Covid-19 funds, among other provisions. It will remain in effect until November 2024, coinciding with the next U.S presidential election.

“We expect investors to regain confidence in taking risks, leading to a small relief rally that began on Friday since the likelihood of a U.S default has diminished significantly,” explained Juan José Fernández-Figares, director of analysis at Link Securities.

Investors are also monitoring key macroeconomic indicators of the U.S economy. The data on private consumption deflator and the final reading of first-quarter GDP indicate a more resilient economy than anticipated, driven by the strong performance of the services sector and a labor market that remains robust rather than collapsing. The May employment data will provide further insights into the state of the world’s leading economy.

In light of these factors, it appears likely that the Federal Reserve (Fed) will adjust its monetary policy. While a few weeks ago, it seemed probable that the Fed would pause rate hikes, the current consensus anticipates a renewed interest rate increase at the June meeting.

Across the rest of the market, numerous altcoins have experienced significant gains. Notable increases include a 2% rise in Binance Coin (BNB) and over 1% gains in Ripple (XRP), Cardano (ADA), and Solana (SOL), among other tokens.

Related:What Is Bitcoin Cash (BCH), and How Does It Work?

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