Bitcoin is attempting to break above the $27,500 resistance, but the risk of a possible U.S. default has hindered its bullish momentum. The government is struggling to get the debt limit increase approved in Congress, which could lead to budget constraints as the debt interest payment increases in the future. Despite the potential risks, some believe that the U.S. debt ceiling standoff is just a “show” as additional money is expected to hit the markets, further fueling inflationary pressure. The correlation between Bitcoin’s digital scarcity and inflationary concerns has made it an attractive investment option in the current market conditions. Meanwhile, gold prices have dropped by 2.5% to a 45-day low of $1,970, and the U.S. Dollar Index (DYX) has gained strength relative to its global counterparts.
The resilient economic data has been a driving factor for the stock market, with the S&P 500 index holding modest gains in May, standing 13% below its all-time high. According to Bitcoin derivatives metrics, professional traders seem to be favoring bullish positions. Margin lending ratios have increased since May 12, coinciding with the recent price recovery of Bitcoin. BTC futures long-to-short metrics also indicate that pro traders have recently increased their bullish positions to their highest level in two weeks. Although Bitcoin has traded down 8% since May 5, investors anticipate a rally toward $28,000 if the U.S. debt ceiling standoff continues. Bitcoin’s market structure is bullish, with no signs of excessive leverage from buyers and weak demand from short-sellers.
It’s important to note that this article does not contain investment advice or recommendations, and every investment and trading move involves risks. Readers should conduct their research before making any decisions.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
View J-S Tremblay website
