A visual representation of the digital cryptocurrency Bitcoin is on display in front of a graph at the Bitcoin course in Paris, February 9, 2021.
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Bitcoin It temporarily rebounded to $28,000 over the weekend for the first time since the beginning of the month, after the Biden administration reached a tentative deal with Republican lawmakers on the US debt ceiling.
The cryptocurrency market leader rose 1% on Tuesday to $27,911.99, according to Coin Metrics. ether rose just over 1% to $1,910.75.
On Monday, Bitcoin climbed to $28,461.45 while Ether reached a high of $1,928.16.
Cryptocurrencies began gaining momentum Saturday evening after House Republicans reached a tentative deal with the White House to raise the debt ceiling and avoid defaults. Parliament is expected to vote on the bill as early as Wednesday.
“Over the past few days, investor concerns have seen BTC drop to a Wednesday low of around $25,800, showing intense volatility.” [the] The US has reached its debt ceiling,” said Matteo Greco, a research analyst at investment firm Finkia International.
Bitcoin and Ether surged the next day.
“But … this means that in the medium term, funds will be taken off riskier assets to buy government bonds, resulting in a further slowdown in trading volume and liquidity in equity and digital asset markets. could potentially have a negative impact on ‘price’, Greco added.
Debt ceiling talks weighed on crypto investors last week, but the latest Federal Reserve meeting minutes also reveal that central bank officials are divided on the direction of rate hikes. .
Both of these factors are making Bitcoin start acting like a risky asset again.Gold Correlation Rebounds from All-Time Highs This Year
Bitcoin is currently testing March resistance around $28,800, according to Yuya Hasegawa, a cryptocurrency market analyst at Japanese bitcoin exchange Bitbank.
Bitcoin and Ethereum are on their worst pace since November, falling 5% and rising less than 1% respectively. Bitcoin is on pace to turn negative for the first time in 2023.
After ending the first quarter up 71%, Bitcoin is down 2% in the quarter. Ether is up 4.4% after posting a 52% gain in the first quarter.