Bitcoin (BTC) price briefly dropped below the $26k level on May 25 as investors panic owing to political partisanship in debt ceiling talks. Fitch Rating placed the United States “AAA” credit rating on negative watch as United States President Joe Biden and Republicans debt ceiling talks failing to reach bipartisanship.
The cryptocurrency market capitalization slides 2 percent more on Thursday to extend its fall this coming week. The worldwide cryptocurrency market capitalization now reaches below $1.10 trillion, with top crypto altcoins such as Ethereum (ETH), XRP Ripple (XRP), Cardano (ADA), Polygon, and Solana (SOL) near to breaking key support levels.
Fitch May Downgrade United States Rating To Negative Amid Debt Ceiling Impasse
Rating agency Fitch placed United States’ “AAA” Long-Term Foreign-Currency Issuer Default Rating (IDR) on Rating Watch Negative. Fitch stated it will downgrade the rating if President Joe Biden’s administration and congressional Republicans do not raise or spend the debt limit by June 1.
Treasury Secretary Janet Yellen warned that the United States Treasury will run out of funds by June 1. The Treasury General Account dropped to $57 Billion from $316 Billion earlier in May, with the opening balance of $636 Billion this fiscal year.
Fitch’s downgrade will affect debt securities, treasury bills, and the country’s post-default ratings. An S&P downgrade of the United States rating in 2011 caused other downgrades and substantial sell-off in stock markets.
“ Nonetheless, we believe dangers have risen that the debt limit won’t be be raised or stopped before the X-date and consequently that the Government could begin to miss payments on some of its obligations.”
Asian stock market opened lower amid growing United States debt default danger and the Treasury running out of funds this coming week. Although while House Speaker Kevin McCarthy is confident about a deal before the June 1 deadline, but selloff has already started owing to debt ceiling brinkmanship.
In the meantime, the United States dollar rises over a 2- 30 days high with the United States Dollar Index (DXY) advancing over 104. The potential of a price hike pause by the United States Fed in June persists to decline, according to CME FedWatch Tool.
Bitcoin (BTC) Price To Break Below 200-WMA
Bitcoin price is expected to end the week below the key 200-WMA. A substantial selloff will follow if the price fails to rebound before the week’s close. Bitcoin price as of now trades near the $26,000 level and Ethereum (ETH) price broke below $1800.
Veteran trader Peter Brandt warned cryptocurrency investors of Bitcoin price probably breaking below $25k to the following support at $24.8k