The U.S. debt ceiling may be reached during Trump's inauguration, potentially signaling a bottom for Bitcoin

U.S. Treasury Secretary Janet Yellen wrote to congressional leaders indicating that the Treasury expects the U.S. to reach its debt ceiling as early as between January 14 and 23, 2025, and may need to take "extraordinary measures" to avoid a federal government debt default. Just before the letter was released, risk assets weakened by the close. U.S. stock markets fell, with the S&P 500, Nasdaq 100, and Dow Jones Industrial Average all down about 1%. Bitcoin dropped 4% from its intraday high. Historically, raising the debt ceiling has been a negative signal for the largest cryptocurrency, with declines or poor performance observed in the subsequent days during the last five instances. Since the cycle low in November 2022, Bitcoin's trend has been consistent with the previous two cycles. The cycles from 2018-2022 and 2015-2018 both experienced significant pullbacks at this point in their respective cycles. Trump's inauguration on January 20 may signal a bottom for Bitcoin.