Bitcoin has hit another resistance level as the US nears a debt ceiling deal.
BTCUSD – Daily Chart
BTC rallied to the $28,000 level but slumped below the $27,000 mark.
Bitcoin could weaken with a debt ceiling deal as it would push the debt ceiling beyond the 2024 election. Bitcoin is seen as an anti-government form of government, less in demand with a functioning government.
The US House is expected to vote on the deal to increase the country’s $31 trillion debt. However, there is still a potential for drama with opposition from lawmakers in both parties.
House Speaker Kevin McCarthy and House Minority Leader Hakeem Jeffries will require approval from Republicans and Democrats to avoid a US debt default in a few days. A large section of left-wing Democrats are said to oppose the deal. At the same time, many Republicans see it as a failure to curb runaway spending. The deal would delay the debt limit until the first quarter of 2025, after the 2024 elections.
Bitcoin Price Prediction
Bitcoin also suffered from hawkish comments by Federal Reserve policymaker Loretta Mester. “I don’t really see a compelling reason to pause,” she told the Financial Times. “I would see more of a compelling case for bringing the rates up and then holding for a while until you get less uncertain about where the economy is going,” Mester added.
A recent release of inflation data in the United States came in higher than expected, leading to the continued bullish case for interest rates.
Weak Chinese economic data was another drag on risk assets, with the country’s manufacturing index at 48.8 despite hopes for 49.4.
Meanwhile, investment bank JP Morgan had a bullish outlook for BTC. “With the gold price rising above $2,000, the value of gold held for investment purposes outside central banks is currently valued at around [$3 trillion],” JPMorgan analysts said.
“In turn, this implies a $45,000 price for bitcoin under the assumption that bitcoin equalises gold in private investors’ portfolios.”
