Bitcoin surges to more than 2-week high on relief over US debt ceiling

Bitcoin has surged to more than two-week high on relief over US debt ceiling.

Bitcoin's value rose to more than two-week high over the debt ceiling of the U.S. debt ceiling.

Bitcoin has risen to the highest level in more than two weeks, thanks to a boost to investor sentiment from a deal on raising the US debt limit.

The largest digital token added as much 3.2% on Monday, and was trading at $28,182 as of 9:32 a.m. in Singapore, oscillating around its 50-day moving average. Smaller tokens such as Ether and Binance Coin also posted gains.

The debt-ceiling agreement between President Joe Biden and House Speaker Kevin McCarthy has fuelled risk sentiment in global markets. But the deal still has to clear Congress quickly to prevent a default. A recent hike 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 the digital-asset exchange Independent Reserve. Front-end funding costs remain elevated relative to crypto returns, leading to negative carry for long-holders. This will remain a headwind for risk assets and the crypto complex, he said. Bitcoin is thriving on a five-day streak of gains, its best stretch since March, alleviating a challenging quarter due to poor liquidity and a US crackdown.

In 2023, the market has partially rebounded from a rout last year that resulted in blowups like the collapse of the FTX exchange. But they remain well off record levels, including Bitcoin's all-time peak of almost $69,000 in 2021.

It is possible the sheer relief of a debt deal will bring traders back to the table and trigger the next big leg-up in the price of Bitcoin, said Tommy Honan, head of market analysis at the crypto exchange Swyftx.

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