Bitcoin below $27k amid debt ceiling talks, regulatory moves

Bitcoin had challenged $27,500 Thursday morning, but a swift retreat early in the afternoon took it down to around $26,400

Bitcoin slipped back below $27k, reversing its gain from a day earlier as investors continued to weigh the ongoing debt ceiling discussions in Washington and the latest regulatory developments.

The biggest cryptocurrency was recently changing hands at nearly $26,700, 2.1 per cent lower over the past 24 hours, as per CoinDesk data. Bitcoin had challenged $27,500 Thursday morning, but a swift retreat early in the afternoon took it down to around $26,400.

Bitcoin is hovering around its recent lows as investors wait for regulatory clarity and whether Wall Street believes any use-case arguments will be made anytime soon, Edward Moya, senior market analyst for forex trader Oanda, stated in a note Thursday. This frustrating trading range has turned off many investors and if the crypto fundamentals do not get better anytime soon, downward pressure could recommence, Oanda said.

More than $20mln of bitcoin futures were liquidated in the last four hours, with 87 per cent of them being long positions, or bets on higher prices, as per Coinglass data.

Ether followed a similar trend, down 1.6 per cent to trade at nearly $1,795 on Thursday afternoon.

Equity markets finished higher Thursday afternoon, with a late rally bringing up the Nasdaq by 1.5 per cent the S&P 500 by 0.95 per cent, and the DJIA by 0.35 per cent.

Alex Tapscott, MD of the digital asset group at Ninepoint Partners, told CoinDesk that BTC has recently performed more like a technology stock than a store of value.

In 2022, nearly all assets declined against the US dollar, he stated. We were in the midst of a liquidity crunch where rates were rising so much that people were deleveraging. The most liquid and safe assets a number of people considered were U.S. Treasuries and U.S. dollars.

The Nasdaq and other tech-centred investments have played a caught up a bit in 2022, Tapscott said. At the same time, we are seeing bitcoin consolidating around the $27k-$30k level.

While some experts contend that the debt ceiling debate could lift “safe-haven” assets like gold and bitcoin, Tapscott stated that he is not convinced that BTC’s price will rise in case of a government default.