Bitcoin and Ethereum Succumb to TradFi – Now What?

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The US debt ceiling decision propelled the S&P 500 and gold prices, overtaking Bitcoin and Ethereum. Bitcoin and Ethereum were trading at profit on a daily time frame at press time.

In a fascinating turn of events, S&P 500 and gold prices surged, outperforming Bitcoin [BTC] and Ethereum [ETH]. This remarkable turnaround can be attributed to the decision of the US Congress on June 1, which chose to suspend the country’s debt ceiling.

Bitcoin and Ethereum under traditional stocks

The United States Congress has successfully approved an agreement that increases the borrowing limit for governments to avoid the potential calamity of a debt default. The Senate passed the deal on June 1 and the House of Representatives approved it the day before.

Once signed into law by President Joe Biden, this agreement will allow the federal government to borrow funds until the next presidential election in November 2024.

The Trend of Cryptos and Stocks

Santiment’s fascinating insights revealed that the decision to raise the debt ceiling had a profound impact on the price movements of various assets.

Traditional stocks, as evidenced by the S&P 500, have rallied remarkably, reaching their highest level since August. Moreover, the price of gold has also seen a rise, as the chart shows.

As of this writing, the price of the S&P 500 has broken above the $4,000 mark, while gold is above $1,900.

Source: Santiment

On the other hand, the chart demonstrated that cryptocurrencies including Bitcoin and Ethereum lagged behind stocks. They had a comparatively lower performance than traditional stocks, showing low correlation.

Bitcoin and Ethereum price trend

Bitcoin has seen a series of fluctuations recently, swinging between highs and lows but consistently staying below the $30,000 price threshold. At the time of this writing, Bitcoin was trading at around $27,160, posting a modest gain of over 1%.

It was showing a bearish trend at press time, as indicated by its Relative Strength Index (RSI) on a daily timeframe. Nonetheless, there has been a noticeable uptrend in its RSI line, thanks to an increase in price.

Source: Trading View

Is your wallet green? Check out the Ethereum profit calculator

Along the same lines, Ethereum also traded at a profit. Its value at the time of writing was around $1,890, reflecting a gain of more than 1.5%. Unlike Bitcoin, Ethereum was in an uptrend, according to its RSI line.

Source: Trading View

As for the future, it remains uncertain whether there will be a stronger correlation between the price movements of Bitcoin, Ethereum, S&P 500 and gold in the coming days.

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