Bitcoin jumps to more than two-week high on relief over US debt ceiling
BITCOIN climbed to the highest level in more than two weeks, amid a boost to investor sentiment from a deal on raising the US debt limit.
The largest digital token added as much 3.2 per cent on Monday (May 29) and was trading at US$28,182 as at 9.32 am Singapore time, oscillating around its 50-day moving average.
Smaller tokens, ranging from Ether to Binance Coin, also posted gains.
The debt-ceiling deal between President Joe Biden and House Speaker Kevin McCarthy has helped risk appetite in global markets. But the agreement still has to clear Congress quickly to avert a US default.
A recent jump in Treasury yields and bets on more US monetary tightening are other potential headwinds.
“This morning’s positive risk sentiment directly relates to the resolution of the debt-ceiling impasse,” said John Toro, head of trading at digital-asset exchange Independent Reserve.
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“Front-end funding costs remain highly elevated relative to crypto returns, resulting in negative carry for long 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 – alleviating a challenging quarter due to poor liquidity and a US crackdown.
Crypto markets have partially rebounded in 2023 from a rout last year that led to blow-ups such as the collapse of the FTX exchange. But they remain well off record highs, including Bitcoin’s all-time peak of almost US$69,000 in 2021.
“It is possible the sheer relief of a debt deal will bring traders back to the table and trigger the next big leg-up in the price of Bitcoin,” said Tommy Honan, head of market analysis at crypto exchange Swyftx. BLOOMBERG
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