Bitcoin(BTC) shows an increase in 0.5% in the last 24 hours and maintains its value around $26,200, while Ethereum (ETH) continues its trend, although he cannot recover the 1,600 dollars.
Digital assets are under pressure due to external factors. On the one hand, the increase in the yields of US Treasury bonds is affecting cryptocurrency prices, considerably reducing risk appetite. In the last days, 10-year Treasury bond yields hit their highest point since 2007.
Cryptocurrencies: what’s behind risk aversion
One of the drivers of this increase in bonds has been the possibility of a US Government shutdown. The resistance of the Republicans in the House of Representativesrelated to Donald Trump, is endangering the financing of the largest economy in the world.
If an agreement is not reached to increase funding for government agencies and public museums by September 30, The temporary closure of the public administration would leave thousands of people without jobs and salaries, having a significant impact on the country’s economy.
The agency Moody’s He also raised a warning that the US credit rating could be at risk. The goal of Trump supporters is to reverse the agreement signed in June between the president, Joe Biden, and the speaker of the House, Mick McCarthyto suspend the Government’s debt limit.
The call ‘Freedom Caucus‘ is demanding more cuts as a condition of giving in, proposing a public spending limit of $1.47 trillion for fiscal year 2024, which implies $120 billion more in cuts than agreed.
Cryptocurrencies: the strength of the dollar and its impact
On the other hand, the US dollar is gaining strength. This Tuesday, the dollar reaches 10-month highs against a basket of six major currencies. In addition to the aforementioned increase in bond yields, this is due to a combination of Strong economic data and the Fed’s firm stance (Fed), which has led the consensus to consider an increase in interest rates more likely.
Although many had anticipated a rapid decline in the dollar once short-term rates peaked, This could continue to strengthen if Powell and his team intensify their actions.
Furthermore, blockchain data indicate an increase in the number of Bitcoins deposited in the exchanges in recent weekssuggesting a prolonged period of weakness for the largest cryptocurrency by market cap.
Hani AbuaglaSenior Markets Analyst at % at US$25,600, a level that has proven to be important support so far.
Breaking this limit could indicate a test of $21,700, where the 61.8% Fibonacci is located. Nevertheless, The MACD indicates a bullish divergence similar to that of fall 2022, and key resistance remains around $28,000.
In the rest of the ‘altcoin’ market, movements similar to those already mentioned in BTC and ETH are observed. The rebound of XRP after having been one of the worst performing cryptocurrencies in recent sessions.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
