The cryptocurrency market started the week on a high, with Bitcoin (BTC) reaching its highest price in the past three weeks. The news that sparked the bullish move was the tentative agreement between US President Joe Biden and top Congressional Republican Kevin McCarthy on the national debt ceiling.
While the deal is yet to be approved by Congress, the news has fueled risk taking in global markets, according to Bloomberg. That positivity was reflected in the cryptocurrency market, with bitcoin returning to the green.
John Toro, head of trading at cryptocurrency exchange Independent Reserve, commented, “This morning’s positive risk sentiment is directly related to the resolution of the debt ceiling impasse.”
He also highlighted the difference in funding costs between cryptocurrencies and other investments, which can be an obstacle for high-risk assets and the crypto complex.
Bitcoin recently surged to nearly $28,500, its highest level since May 8, with a 4% gain. Although there has been a slight pullback since then, the cryptocurrency is still above $28,000. However, the long-term view indicates a sideways consolidation for bitcoin.
Biden agrees to raise US debt ceiling
The debt ceiling is a legal limit that determines how much national debt the U.S. Treasury can take on. This limit is currently set at $31.4 trillion.
Treasury Secretary Janet Yellen has warned that bankruptcy is very likely unless a deal is reached. The proposed deal would suspend the debt ceiling until January 2025, allowing the government to increase its debt without restrictions.
Tommy Honan, head of market analysis at cryptocurrency exchange Swyftx, commented: “It is possible that the massive relief provided by a debt deal will bring traders back to the table and trigger the next big surge in Bitcoin price.”
The cryptocurrency market as a whole experienced an uptick, with the total market cap increasing 3% in a single day to $1.22 trillion.
Capital inflows of $37 billion boosted all digital assets, creating volatility in a market that has been stagnant in recent weeks.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, also posted a gain of 3.8% on the day, reaching $1,900 for the first time since May 8.
While other altcoins also posted gains, none matched Bitcoin, which led the market on Monday.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
