In this photo illustration, a visual representation of the digital cryptocurrency, Bitcoin is seen in front of a Bitcoin course graph on February 09, 2021 in Paris, France.
Chesnot | Getty Images
Bitcoin briefly regained the $28,000 level over the extended holiday weekend for the first time since the beginning of the month, after the Biden administration reached a tentative deal with Republican lawmakers to resolve the US debt ceiling.
The crypto market leader rose 1% on Tuesday at $27,911.99, according to Coin Metrics. Ether was up a little more than 1% at $1,910.75.
On Monday, Bitcoin rose to $28,461.45, while Ether reached a high of $1,928.16.
Cryptocurrencies rallied on Saturday evening after House Republicans reached a tentative deal with the White House to raise the nation’s debt ceiling and scrap the existing one. Congress is set to vote on the bill by Wednesday.
“In the past few days, Wednesday has dropped to the lowest trading price of $25,800,” said Matteo Greco, a research analyst at investment firm Phoenicia International.
Bitcoin and Ether roared higher the next day.
“However… this means that in the medium term, money will be withdrawn from more risky assets to buy government bonds. The result may be more volatility and liquidity for the stock and digital value markets, which may have a negative impact on prices,” Greco added.
While last week’s debt ceiling negotiations weighed on crypto investors, the minutes of the latest Federal Reserve meeting also left central bank officials divided on where to go with interest rate hikes. With both of these factors, Bitcoin is starting to look like a risky asset, just as it started trading alongside gold earlier this year.
According to Yuya Hasegawa, a crypto market analyst at Japan’s Bitbank, Bitcoin is testing the March resistance level of $28,800.
Bitcoin and Ether are down 5% since November and on pace for their worst month in less than 1%. Bitcoin is on pace for its first negative month in five.
Bitcoin fell 2% during the quarter, after ending the first quarter up 71%. Ether increased by 4.4%, after posting a 52% gain in Q1.
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