Bitcoin Hits Over Two-Week High on US Debt Ceiling Relief

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(Bloomberg) – Bitcoin hit its highest level in more than two weeks amid strengthening investor sentiment thanks to an agreement to raise the US debt ceiling.

The largest digital token added up to 3.2% on Monday and traded at $28,182 as of 9:32 a.m. Singapore, hovering around its 50-day moving average. Smaller tokens ranging from Ether to Binance Coin also saw gains.

The debt ceiling agreement between President Joe Biden and House Speaker Kevin McCarthy has helped risk appetite in global markets. But the deal still needs to be quickly approved by Congress to avoid a US default. A recent jump in Treasury yields and bets on further US monetary tightening are other potential headwinds.

This morning, the positive risk sentiment is directly linked to the resolution of the debt ceiling impasse, said John Toro, head of trading at the independent digital asset exchange reserve. Initial funding costs remain very high relative to crypto yields, resulting in negative carry for long-time holders. This will continue to prove a headwind for risk assets and the crypto complex.

Bitcoin is on a five-day streak of gains, its best stretch since March, mitigating a tough quarter due to low liquidity and a US crackdown.

Crypto markets have partially rebounded in 2023 after a rout last year that led to blowouts such as the collapse of the FTX exchange. But they remain far from record highs, including Bitcoin’s all-time high of nearly $69,000 in 2021.

It’s possible that the simple relief of a debt deal will bring traders back to the table and trigger the next big bitcoin price rally, said Tommy Honan, head of market analysis at Swyftx.

More stories like this are available at bloomberg.com

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