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Bitcoin climbed to the highest level in more than two weeks amid a boost to investor sentiment from a deal on raising the U.S. debt limit.
The largest digital token added as much 3.2 per cent on Monday before paring some of the advance to trade at US$28,006 as of 8 a.m. in London. Smaller tokens ranging from Ether to Binance Coin posted gains but were also off intraday highs.
The debt-ceiling deal between President Joe Biden and House Speaker Kevin McCarthy has helped risk appetite in global markets. But the agreement still has to clear Congress quickly to avert a U.S. default. A recent jump in Treasury yields and bets on more U.S. monetary tightening are other potential headwinds.
“This morning’s positive risk sentiment directly relates to the resolution of the debt-ceiling impasse,” said John Toro, head of trading at digital-asset exchange Independent Reserve. “Front-end funding costs remain highly elevated relative to crypto returns, resulting in negative carry for long holders. This will continue to prove a headwind for risk assets and the crypto complex.”
Bitcoin is on a five-day streak of gains — its best stretch since March — partly alleviating a tough quarter due to poor liquidity and a U.S. crackdown.
Since the lows of November 2022, Bitcoin posted five-day winning streaks a dozen times and rose an average of almost 19 per cent over the subsequent 20 days.
Crypto markets have partially rebounded in 2023 from a rout last year that led to blowups such as the collapse of the FTX exchange. But they remain well off record highs, including Bitcoin’s all-time peak of almost US$69,000 in 2021.
“Bitcoin for now remains in a familiar range between US$25,000 and US$30,000, and we don’t think a future rally can be extrapolated from this latest move,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider OrBit Markets.