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Crypto wrap: US debt ceiling negotiations keeping market on the toes

The negotiations around the US debt ceiling have been slow, but media reports suggest that US President Biden and US House of Representatives Kevin McCarthy appeared to be nearing a deal on Thursday

Cryptocurrency

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Raghav Aggarwal New Delhi

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The cryptocurrency market has remained flat owing to uncertainty around negotiations on the US debt ceiling. According to experts, inflation in the United Kingdom and concerns around regulations are also factors behind the market cap remaining largely unchanged.

According to data from coinmarketcap, Bitcoin is down 1.46 per cent in the last seven days and was trading at $26,445 on Friday. Ethereum was up 0.26 per cent during the period, trading at $1,813 on Friday. The total market cap was down to $1.1 trillion from $1.2 trillion last week. 

"The uncertain macroeconomic climate has contributed to a decline in the crypto market, fueled by concerns surrounding inflation, crypto regulations, and the ongoing debt ceiling stalemate. The Federal Open Market Committee minutes revealed a divergence of opinions among US central bankers regarding potential rate hikes, intensifying traders' focus on the forthcoming Core PCE inflation data for April, set to be released this Friday," the research team of crypto platform CoinDCX told Business Standard.

"The market sentiment has primarily been driven by ongoing negotiations related to the debt ceiling, drawing the attention of investors. Looking at its performance in the month-to-date, Bitcoin has seen a decline of 9 per cent," said Alankar Saxena, CTO and co-founder of Mudrex.

The negotiations around the US debt ceiling have been slow, but media reports suggest that US President Joe Biden and the speaker of the United States House of Representatives, Kevin McCarthy appeared to be nearing a deal to cut spending and raise the government's $31.4 trillion ceiling on Thursday. They have time till June 1 to come up with a deal.

In the last 24 hours, the major crypto tokens have risen.

"The slight increase could be attributed to positive weekly unemployment data in the US," said Parth Chaturvedi, Investments Lead, CoinSwitch Ventures.

"Presently, Bitcoin faces immediate resistance at the $26,471 level. If the price closes near this level, there is potential for further upward movement toward the $26,600 and $26,800 zones," said Saxena. 

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First Published: May 26 2023 | 5:03 PM IST

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