In a startling revelation, bloomberg 
Initially, the markets rejoiced after the US House and Senate successfully passed the Biden-McCarthy Debt Ceiling Deal. This positive development, combined with the possibility of the US Federal Reserve postponing an interest rate hike in June, led to an upswing in global stock and crypto markets. The Dow Jones skyrocketed by 2.1%, the S&P 500 surged by 1.4%, and the Nasdaq surpassed its April 2022 highs by nearly 1%. However, this newfound optimism might be short-lived, especially for riskier assets like cryptocurrencies.
Challenges lie ahead, with the US Treasury Department’s plan to replenish its depleted cash balance through the issuance of an estimated $1 trillion in Treasury bills post the debt ceiling deal. Experts at Citigroup foresee a bleak outlook for Bitcoin (BTC) and Ethereum (ETH) shortly, as the Treasury General Account’s cash reserves dwindled to a mere $22.89 billion on June 1, plunging from $635.99 billion in March. This move is expected to result in heightened volatility and weaker returns in the crypto market, raising the specter of a potential recession due to the drain of US dollar liquidity.
Fiona Cincotta, the senior market analyst at City Index, emphasized the criticality of Bitcoin’s support level, indicating that any breach below $25,000 could trigger a crash. Cincotta believes that the uncertain macro backdrop, coupled with recessionary fears, poses a challenge to Bitcoin’s performance. She suggests that a dovish pivot from the Federal Reserve might be the catalyst needed for Bitcoin to make a substantial upward move.
Notably, Bitcoin and Ethereum prices have stagnated due to macroeconomic issues, regulatory barriers, and lackluster technical charts. Bitcoin’s price is close to falling below the 200-weekly moving average (WMA). US treasuries and the dollar have gained momentum, with the DXY index rising above 104. The Senate’s acceptance of the debt ceiling accord paved the path for President Biden’s June 3 signature.
Presently, Bitcoin is trading around $27,150 is on the sideways, while Ethereum briefly exceeded $1,900 but remains under selling pressure.
As the crypto markets prepare for a meltdown, all eyes are on the debt ceiling crisis, cash reserves, and market liquidity.
The crypto market pulses with activity as XRP tests key resistance levels, PEPE hints at…
As investors scan the market for their next big move, one token is beginning to…
Shiba Inu (SHIB), the wildly popular meme coin, has once again made a splash in…
Over the past week, Pepe Coin (PEPE) has seen a sharp rise of around 42%,…
Over the past week, a handful of altcoins broke away from the market consolidation, delivering…
After a long, painful stretch for altcoins, the market is finally showing signs of recovery.…
