Bitcoin
and other cryptocurrencies were largely down early on Thursday, with concerns around falling liquidity in focus following the likely passage of legislation to lift the U.S. debt ceiling.
Bitcoin was down 1.2% at $26,856. The largest cryptocurrency has fallen back in the last couple of days from levels above $28,000.
“Bitcoin faces a number of potential banana skins in June now the debt ceiling drama looks to have passed. Once the Senate likely backs the debt-limit legislation, the market faces a flood of treasury bill issuance which will likely draw liquidity away from risk assets like Bitcoin,” said Antoni Trenchev, managing partner of crypto lender Nexo.
The House of Representatives approved a deal to suspend the U.S. federal government’s $31.4 trillion debt ceiling late on Wednesday and it now heads for Senate approval. That could lead to up to $1 trillion in U.S. Treasury issuance in the coming weeks and months.
“For Bitcoin, it’s quite simple: Stay above the 200-week moving average around $26,300 and the bullish uptrend from the November low of $15,500 is intact. On the upside, get above $31,000 and things might start to get really interesting,” said Nexo’s Trenchev.
Beyond Bitcoin,
Ether
—the second-largest crypto—was down 0.6% to $1,858. Smaller cryptos or altcoins were mixed, with
Cardano down 3.3% but
Polygon
rising 0.3%.
Dogecoin
gained 0.2%.
Write to Adam Clark at adam.clark@barrons.com
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