Bitcoin is still in a bearish trend even after US inflation data came out as expected. The uncertainty that looms over the market this time around is tied to the US debt ceiling which is reportedly reaching its limit. As it draws near, it is increasingly negative for risk assets, which might see BTC drop back to $25,000.
US Debt Ceiling Looms Over Bitcoin
The effect of the climbing US debt ceiling is showing prominently in not only the crypto market but in the stock market as well. In fact, it is Bitcoin’s high correlation with the stock market that has seen it go down as well in such market conditions.
According to Treasury Secretary Janet Yellen, the US will hit its debt ceiling as early as June 1. This only leaves around two weeks before then, and investors are understandably wary at this time as hitting this debt ceiling could be catastrophic for the economy.
A likely outcome is that the US will increase its debt ceiling once more, as it has been doing since 1960. However, it still leaves a lot of questions to be answered regarding the economy. Thus, investors are more likely to play it safe…
