Tuesday saw a small downward correction for Bitcoin (BTC), which fell just below the $27,000 level as market participants keenly followed the continuing debt limit talks in Washington.
According to statistics from CoinDesk, the top cryptocurrency by market capitalization was down around 1.3% for the day, trading at roughly $26,950. BTC’s price has been constant over the last 24 hours between $26,800 and $27,400.
Some experts think that addressing the debt ceiling problem might possibly help bitcoin since U.S. Treasury Secretary Janet Yellen has warned of a probable violation of the debt limit as early as June 1 and stressed the danger of a default leading to a recession.
According to BitBull Capital CEO Joe DiPasquale, the present macroeconomic environment is conductive to further use of cryptocurrencies. He said that while market players try to preserve their capital, lifting the debt limit will also help risky assets.
According to Lucas Outumuro, head of research at blockchain analytics company IntoTheBlock, there may be demand for BTC regardless of whether an agreement is struck on raising the debt limit. He compared the ongoing bank crisis to the ongoing debt ceiling talks, emphasizing how both situations highlight the flaws in the established order and raise questions about its long-term viability, which in turn sparks interest in alternative assets like cryptocurrencies.
By market capitalization, Ether (ETH), the second-largest cryptocurrency, fell slightly on Tuesday, falling 0.2% to trade at $1,820. The governance token for the Lido liquid staking platform, LDO, increased by an extra 3% while maintaining its upward trend from Monday. MATIC, the native token of Layer 2 blockchain Polygon, fell 2.8% to trade at around $0.82 cents.
The cryptocurrency market is still going through a period of consolidation, with the price of bitcoin continuing to trade in a very narrow range, as investors keenly await the outcome of the debt limit discussions. The results of these negotiations might have a big effects on the direction that cryptocurrencies take in the next days, especially when combined with continuous economic uncertainty.