• Bitcoin (BTC) has come under strong selling pressure and is trading 2.48% down at a price of $27,116 with a market cap of $525 billion.
• The US President Joe Biden and House Speaker Kevin McCarthy reached a deal to suspend the debt ceiling until January 1, 2025.
• Analysts have revised their expectations for a dovish monetary policy by the US Fed as there’s a 66% probability that the Fed will raise interest rates by 25 basis points for the fourth consecutive time in the June meeting.
Bitcoin Price Plunges Below $28K
Bitcoin (BTC) faces selling pressure as it dips below $28,000 and trades at a price of $27,116 with a market cap of $525 billion as uncertainty looms around the US debt ceiling raise.
US Debt Ceiling Vote Looms
US President Joe Biden and House Speaker Kevin McCarthy reached an agreement earlier this week to suspend the debt ceiling until January 1, 2025 but the deal has yet to come to fruition. If lawmakers agree on raising the debt ceiling then US Treasury would issue $1 trillion of debt to replenish its Treasury General Account before its impending deadline.
Quantitative Tightening Impact on Bitcoin
Analysts have expressed concerns over potential quantitative tightening impact on Bitcoin if US agrees upon raising its debt ceiling as it might lead Federal Reserve to raise interest rates further. According to CME FedWatch Tool, there’s 66% probability that Fed will raise interest rates by 25 basis points for fourth consecutive time in June meeting. This could potentially send shockwaves across global financial markets hurting risk assets like stocks and crypto majorly.
Investors On Edge
Investors are feeling uncertain over both sides reaching an agreement over US debt ceiling leading them to become more cautious about their investments in Bitcoin which is why BTC is experiencing strong selling pressure bringing down its price close to $27,000 along with other cryptocurrencies dropping close to 2%.
Conclusion
The outcome of this vote has potential consequences for investors in cryptocurrency markets due its impact on global financial markets and risk assets like stocks and crypto majorly hence making investors remain on edge while waiting for an outcome from this vote which can help them decide their next course of action regarding investing in cryptocurrencies or not