A recent letter from US Treasury Secretary Janet Yellen to congressional leaders has sparked concerns about the country’s debt ceiling, which may have implications for Bitcoin’s performance. According to CoinDesk analyst James Van Straten, the Treasury Department expects the US to reach its debt ceiling between January 14 and 23, 2025, potentially requiring “special measures” to avoid a federal government debt default. Historically, raising the debt ceiling has had a negative impact on Bitcoin.
Historical Precedent
In the past, Bitcoin has declined or underperformed in the days following a debt ceiling increase. This trend has been observed in five previous instances, raising concerns about the potential impact on the cryptocurrency’s value.
Bitcoin’s Current Cycle
Since its cycle low in November 2022, Bitcoin has been following a pattern similar to its previous two cycles. The 2018-2022 and 2015-2018 cycles both experienced significant retracements at this point, which may indicate a potential downturn for Bitcoin.
Potential Bottom Signal
However, some analysts suggest that the inauguration of President Trump on January 20 could serve as a bottom signal for Bitcoin, potentially marking a turning point in its performance.
Source: M.theblockbeats.info
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