Raising the debt ceiling means the US Treasury could issue new bonds to raise cash to meet its previous obligations. But what impact can it have on cryptocurrency?
the market of cryptocurrencies it remained with less activity during the weekend, with slight price movements. However, this week may be key for the cryptocurrency in view of progress on the debt ceiling in USA.
Raising the debt ceiling means that the United States Treasury it could issue new bonds to raise cash to meet its previous obligations. As a result, the cash pile in the Treasury General Account could go from US$95,000 million in May to US$550,000 million in June and US$600,000 million in the next three months, according to the latest estimates from the Treasury Department.
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Ari Bergmanfounder of risk management firm Penso Advisors, estimates that the Treasury will surpass $1 trillion by the end of the third quarter of 2023. “My biggest concern is when the debt limit issue is resolved, and I think that’s how it will be, there will be a very, very deep and sudden liquidity drain,” Bergmann said.
Bitcoin: what will happen to the price
In other words, The cash available to buy riskier assets like stocks, Bitcoin, and cryptocurrencies is likely to experience downward price pressure at some point after the debt ceiling is raised.
Such macroeconomic hurdles could prevent Bitcoin from reclaiming its yearly highs of more than $30,000 in the coming months, says independent market analyst Income Sharks.
“Most likely we’re going to be between $20,000 and $30,000 and even have a peak season,” the analyst noted, adding: “There’s no new money coming in; everything’s rotating […] Unless we get a new narrative or the actions to find a way to recover, the US election in 2024 seems more likely to be the next big catalyst.
If this important resistance zone is not broken decisively, the chances of a reversal will increase.
Source: Ambito
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