Following a recent period of declining values, the level of activity in Bitcoin addresses has shown signs of recovery. The anticipated increase in the US debt ceiling is considered a potential catalyst for this development.
During the early morning trade in Asian hours on Monday, May 29, Bitcoin (BTC) experienced a significant surge, increasing by over 3.5%. This occurred concurrently with the US government’s preparations to raise the debt ceiling, which currently stands at $31.4 trillion.
At the time of writing, Bitcoin (BTC) was trading at $28,053, marking a 3.5% gain, with a market capitalization of $542 billion. In addition to BTC, Ether (ETH) and other leading altcoins have also demonstrated notable upward movements, recording gains of over 3% recently.
The possibility of a deal being reached between President Joe Biden and House Speaker Kevin McCarthy to raise the debt ceiling has had a significant impact on the global market. However, it is crucial for the agreement to pass through the US Congress promptly to prevent any potential default.
The increase in Treasury Yields and the expectations of monetary tightening in the US are additional factors that could pose challenges in the future. John Toro, the head of trading at digital-asset exchange Independent Reserve, spoke to Bloomberg and highlighted the significance of resolving the debt-ceiling issue for the current market sentiment.
Also Read This Related: Biden Reached ‘Tentative’ Agreement Regarding The US debt Ceiling : Report
He mentioned that the high costs associated with short-term funding compared to returns from cryptocurrencies result in negative carry for long-term holders, which could impede risk assets and the overall cryptocurrency market.
After a period of significant selling pressure, Bitcoin is currently experiencing a five-day consecutive increase, marking its longest streak since March. The year 2023 has been favorable for cryptocurrency investors, following a challenging period in 2022.
Moreover, on-chain data indicates a rebound in Bitcoin address activity, which had reached low levels earlier this month. Presently, BTC address activity has surged to its highest point in three weeks.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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