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Bitcoin seeks to regain $28,000, boosted by U.S. debt ceiling

By Álvaro Estevez / Alejandra Zamora

Date: Monday 29 May 2023

Bitcoin seeks to regain $28,000, boosted by U.S. debt ceiling

(Sharecast News) - There´s been a comeback in the cryptocurrency market. Bitcoin (BTC) has risen around 3% in the last 24 hours and is on the verge of regaining the $28,000 level. Ethereum (ETH), for its part, has soared by the same amount and is trying to consolidate the $1,900 level, a level not seen since the beginning of May.
Javier Molina, senior market analyst at eToro, points out that, from a technical point of view, "there is still pressure on the first support delimited by $26,500-$26,800 ". "Despite seeing sessions with prices below this zone, it seems that the buying pressure is holding off the bearish attacks at 25,800 points," he stated.

Molina commented that, in order to think about a more significant rebound, "the 26,800 level should be surpassed and we should look to consolidate above 27,500". The key zone on the upside is marked by 28,500 points. "Below that, if 26,500 is lost, the technical key is $25,000", he added.

The recovery of digital assets has been triggered, like almost all their action in the last month, by the agreement on the US debt ceiling. On Sunday, President Joe Biden and Republican House Speaker Kevin McCarthy announced that the two sides had finally reached an understanding to unblock the situation and avoid a historic default that could occur in early June. However, the agreement must now be ratified by both houses of Congress.

The agreement contemplates significant spending cuts, strengthens work requirements in public aid programs and rescinds unused Covid-19 funds, among other things. The agreement will also be in effect until November 2024, when the next U.S. presidential election will be held.

"We expect investors to bet on risk again, in what can be considered a small relief rally, which began on Friday, as it is already very unlikely that the US will default," explained Juan José Fernández-Figares, director of analysis at Link Securities.

On the other hand, investors are also paying attention to the macroeconomic signals sent by some of the main indicators of the US economy. The private consumption deflator data and the final reading of first-quarter GDP show a "more resilient economy than expected," stated Fernández-Figares, driven by "the good performance of the services sector and by a labor market that, far from collapsing, is still very buoyant". The May employment data will give more clues about the situation of the world's leading economy.

In this regard, everything seems to point to the Federal Reserve (Fed) taking a new turn in its roadmap. While a few weeks ago everything pointed to a pause in rate hikes, the consensus now expects the central bank to raise interest rates again at its June meeting.

In the rest of the market, there have been significant gains in most altcoins. The highlights include rises of 2% for Binance coin (BNB) and more than 1% for Ripple (XRP), Cardano (ADA) or Solana (SOL), among other tokens.


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