Bitcoin at two-week high post relief over US debt ceiling

livemint.com:

Bitcoin has jumped to more than its two week high amid boost to investor sentiment from the deal on raising the US debt limit.

Bitcoin jumped as much 3.2 per cent on Monday and was trading at $28,182 as of 9:32 a.m. in Singapore, around its 50-day moving average.  Others ranging from Ether to Binance Coin also posted gains.

US President Joe Biden said on Sunday he had finalized a budget agreement with House Speaker Kevin McCarthy to suspend the $31.4 trillion debt ceiling until January 1, 2025 and that the deal was ready to move to Congress for a vote. 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, reported Bloomberg.

“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," he added.

The digital token currency is on a five-day streak of gains, its best since March, at a time when the quarter is challenging due to poor liquidity and US crackdown.

Crypto markets have partially rebounded in 2023 from a rout last year that led to blowups such as the collapse of the FTX exchange. But they remain well off record highs, including Bitcoin’s all-time peak of almost $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.