In the early morning hours of the Asian market on Monday, Bitcoin (BTC) saw a sudden surge to the north, jumping more than 3.5%. This occurs as the US plans to raise the debt ceiling further, beyond the current $31.4 trillion. At the time of writing, Bitcoin (BTC) is trading 3.5% higher at a price of $28,053 and a market cap of $542 billion. Alongside BTC, Ether (ETH) and other high-performing altcoins have also demonstrated strong growth, gaining over 3% recently.
The likelihood of an agreement to raise the debt ceiling between President Joe Biden and House Speaker Kevin McCarthy has ignited the global market. However, to avoid any potential default, the deal must pass through the US Congress soon. Furthermore, the increase in Treasury yields and bets on US monetary tightening adds potential headwinds for the market. John Toro, head of trading at digital asset exchange Independent Reserve, shared his thoughts on the current development, stating that the current positive risk sentiment is directly related to the resolution of the debt-ceiling deadlock.
One factor to consider is the elevated front-end funding costs relative to crypto returns, which result in a negative carry for long holders. This will continue to act as a headwind for risk assets and the crypto complex.
There have been some notable on-chain Bitcoin developments recently. Despite facing strong selling pressure for some time, Bitcoin is experiencing a five-day streak of gains, the longest stretch since March. So far, 2023 has proven to be a fruitful year for crypto investors, following a major winter in 2022.
On-chain data indicates that the address activity for Bitcoin is rebounding, having reached fresh lows earlier this month. BTC’s address activity has now surged to a three-week high. An increase in Bitcoin’s utility is necessary for crypto assets to enjoy sustained rallies, and it will be important to monitor whether BTC can maintain one million or more daily active addresses heading into June.
While the current surge in the market is promising, it’s essential to remember that the presented content may include personal opinions and is subject to market conditions. Always conduct thorough market research before investing in cryptocurrencies, keeping in mind that neither the author nor the publication holds any responsibility for personal financial loss.
Source: Coingape
