Bitcoin, Crypto Slides As Fitch Puts US Rating Watch Negative On Debt Ceiling Standoff – Crypto News – Crypto News
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Bitcoin, Crypto Slides As Fitch Puts US Rating Watch Negative On Debt Ceiling Standoff Bitcoin, Crypto Slides As Fitch Puts US Rating Watch Negative On Debt Ceiling Standoff

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Bitcoin, Crypto Slides As Fitch Puts US Rating Watch Negative On Debt Ceiling Standoff – Crypto News

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Bitcoin price briefly fell below the $26k level on May 25 as investors panic due to political partisanship in debt ceiling talks. Fitch Ratings placed the United States “AAA” credit rating on negative watch as US President Joe Biden and Republicans debt ceiling talks failing to reach bipartisanship.

The crypto market cap slides 2% more on Thursday to extend its fall this week. The global crypto market cap now reaches below $1.10 trillion, with top altcoins such as Ethereum, XRP, Cardano, Polygon, and Solana nearing breaking key support levels.

Fitch May Downgrade US 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 said it would 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 warns that the US Treasury will run out of funds by June 1. The Treasury General Account fell to $57 billion from $316 billion earlier in May, with an 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 US rating in 2011 caused other downgrades and massive sell-off in stock markets.

“However, we believe risks have risen that the debt limit will not be raised or suspended 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 rising US debt default risk and the Treasury running out of funds this week. While House Speaker Kevin McCarthy is confident about a deal before the June 1 deadline, the selloff has already started due to debt ceiling brinkmanship.

Meanwhile, the US dollar rises over a 2-month high with the US Dollar Index (DXY) advancing above 104. The probability of a rate hike pause by the US Fed in June continues to decline, accordingly to CME FedWatch Tool.

Also Read: Terra Classic Developer L1TF To Work On USTC Repeg To $1 After Parity Upgrade

Bitcoin Price To Break Below 200-WMA

btc price is expected to end the week below the key 200-WMA. A massive selloff will follow if the price fails to rebound before the week’s close. BTC price currently trades near the $26,000 level and eth price broke below $1800.

Veteran trader Peter Brandt warns crypto investors BTC price probably breaking below $25k to the next support at $24.8k

Also Read: Stocks And Crypto May Crash Within Weeks Of Debt-Ceiling Deal; Here’s Why

Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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