The crypto market went for a nosedive as US debt ceiling talks remained without an outcome, while bearish crypto signals overcame the markets.
Multiple reasons could be responsible for the crypto market going red in the last 24 hours, with the most viable being the US debt ceiling talks that has not yielded any outcome yet. The situation was described by experts as extremely unpredictable, which did not bode well for crypto.
Bearish crypto sentiments have flooded the market, with investors rushing to sell their holdings and prevent further loss. The silver lining is Bitcoin’s resilient support at $26000, which has stood firmly after a slight hiccup.
Traders were especially worried about the steep drop of Bitcoin on May 24 that sent the token dipping below $26000 momentarily. It was quick to recover, though, and has been trading above the mark for the last few hours.
European and American stock markets also suffered losses in the last few days due to constant sell-offs. While the crypto market has usually been unrelated to equity, it also faces concerns from the US debt situation since it may determine the amount of liquidity injection in the market.
In the worst-case scenario of the US defaulting on its debt, the US Treasury could step in, drying up sufficient liquidity in the markets. The bearish crypto signals could, thus, continue for a while.
BTC/USD 1D price chart
Bitcoin is currently trading at around $26200 on May 25, 2023, with BTC/USD down by around 2% in the previous 24 hours. BTC/USD is trading below its 20-day EMA (27,560.04) as BTC’s 24-hour volume stayed above $13.5 billion. Bitcoin has seen around 58.28% returns on a year-to-date basis.