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Bitcoin prices have failed to hold gains above $30,000 reached in April.
Dreamstime
Bitcoin
and other cryptocurrencies turned higher Tuesday but continued to languish below key levels amid a correction from April’s recent peak for digital asset prices. A deal to raise the U.S. debt ceiling remains elusive and has created uncertainty for crypto traders.
The price of Bitcoin has risen 2% over the past 24 hours to $27,325. The largest digital asset remains stuck in a zone between $26,500 and $27,500, which has held for much of the past two weeks and represents one of the tightest trading ranges for Bitcoin’s price in years. While Bitcoin remains up by some two-thirds so far this year, it failed to hold April’s peak above $30,000—the highest levels since June 2022—with traders eyeing multiple catalysts against the backdrop of brewing volatility.
“Bitcoin has stabilized over the past week above important support near $25,200. Short-term momentum remains to the downside, however, suggesting the correction will keep hold,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “Intermediate-term momentum is still positive but has waned … Bitcoin remains challenged long-term given the downtrending weekly [indicators].”
Among the developing catalysts that traders have been monitoring are the U.S. macroeconomic picture, including the pathway for interest rates and a risk of default if the U.S. debt ceiling isn’t raised. Both forces similarly impact the stock market and have seen Bitcoin trade in step with the
Dow Jones Industrial Average
and
S&P 500.
In particular, the prospect of a U.S. debt default looms large as a major brake on momentum for risk-sensitive assets.
“The risk of default is very small but if it were to happen that could feel like an uppercut to risk appetite which would send cryptos sharply lower,” said Edward Moya, an analyst at broker Oanda. “Bitcoin appears content to trade near the lower boundaries of its recent trading range between $26,500 and $30,000 … Crypto traders are not sure how Bitcoin will behave throughout the next several days of debt ceiling negotiations.”
Beyond Bitcoin,
Ether
—the second-largest crypto—gained 2% to $1,850. Smaller cryptos or altcoins also were higher, with
Cardano
up less than 1% and
Polygon
popping 3%. Memecoins also rose, with
Dogecoin
and
Shiba Inu
each rising 2%.
Write to Jack Denton at jack.denton@barrons.com