Bitcoin Consolidates in a Tight Trading Range

Daily volatility is low in Bitcoin as the cryptocurrency consolidates in a tight range.

BTCUSD – Daily Chart

BTCUSD – Daily Chart

The price of BTC trades between $26,000 and $28,000, and a potential breakout is coming. 

Bitcoin is suffering from a lack of a bullish catalyst, with some fearing that the coin could suffer from the US debt deal.

The US reached its debt limit of $31.4 trillion in January, leading to measures from the Treasury to keep the government functioning. That has meant assets like bitcoin have been under pressure as fears of government default and lower liquidity remain. 

The Treasury General Account balance has declined from $500 billion at the start of February to $68 billion last week, according to MacroMicro. The figure is expected to drop to $30 billion in early June, so a debt deal is needed before then.

If a deal is reached, the Treasury must rebuild its cash balance by issuing new government bonds. That could take liquidity out of the system and add to bond yields.

Bitcoin Price Prediction

Bitcoin is sensitive to dollar swings, and a debt deal would also likely lead to a rally in the dollar as overseas investors come back to the greenback without default fears. 

Federal Reserve Bank of St. Louis President James Bullard helped the outlook for BTC by predicting no fewer than two more rate hikes would come this year. 

“I’m thinking, you know, two more moves this year. Exactly where those moves would be this year I don’t know, but I’ve often advocated ‘sooner rather than later’” said during a conference in Texas.

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