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U.S. Debt Ceiling Looms in Signal for Bottom in Bitcoin (BTC) Price Cycle

The U.S. is likely to hit the maximum it’s legally allowed to borrow at some point between Jan. 14 and Jan. 23, Treasury Secretary Janet Yellen said in a Friday letter to the speaker of the House of Representatives, Mike Johnson. After that, the Treasury will take “extraordinary measures” to cut borrowing.

“I respectfully urge Congress to act to protect the full faith and credit of the United States,” she wrote. In June 2023, Congress suspended the debt limit until Jan. 1, 2025.

Risk assets weakened into the market close, just before the letter was publicized. U.S. equities fell, with the S&P 500, Nasdaq 100 and Dow Jones Industrial Average all losing about 1%. Bitcoin dropped as much as 4% from its intraday high.

Raising the debt ceiling has historically been a negative signal for the largest cryptocurrency, which has dropped or underperformed during the following days on the past five occasions.

Debt Ceiling and BTC Price (Glassnode) (Wikipedia) (Reuters) (The New York Times) (Bloomberg)

This December has not been a strong month for bitcoin, which is down 3% and on track for its first red month since August.

To add to the political and economic uncertainty, President-elect Donald Trump’s inauguration will occur on Jan. 20, between the dates Yellen highlighted.

According to Zerohedge, Congress first established a debt limit of $45 billion back in 1939 and has raised it 103 times as government spending continues to outpace tax receipts. The U.S. national debt is now over $36.2 trillion.

Another influence on the bitcoin price is its parallel to previous cycles. Since the cycle low that occurred during the FTX collapse in November 2022, BTC has been aligned with the previous two cycles.

It is now just shy of a 500% return, similar to the two previous cycles at the same point in the cycle. That’s not a good sign for the bulls.

The 2018-2022 and 2015-2018 cycles both saw significant drawdowns at this point in the cycle, highlighted by the red box in the chart below. It’s just possible Trump’s inauguration date of Jan. 20 could signal a bottom for bitcoin.

BTC: Price Performance Since Cycle Low (Glassnode)



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James Van Straten

https://www.coindesk.com/markets/2024/12/30/u-s-debt-ceiling-looms-in-signal-for-a-bitcoin-cycle-bottom

2024-12-30 12:45:21

bitcoin
Bitcoin (BTC) $ 84,429.62 0.76%
ethereum
Ethereum (ETH) $ 1,660.15 4.81%
tether
Tether (USDT) $ 1.00 0.01%
xrp
XRP (XRP) $ 2.14 0.93%
bnb
BNB (BNB) $ 589.47 0.54%
solana
Solana (SOL) $ 131.96 3.19%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.16398 0.74%
tron
TRON (TRX) $ 0.256034 3.53%
cardano
Cardano (ADA) $ 0.644231 0.33%
staked-ether
Lido Staked Ether (STETH) $ 1,657.37 5.01%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 84,280.58 0.49%
leo-token
LEO Token (LEO) $ 9.40 0.09%
avalanche-2
Avalanche (AVAX) $ 20.27 3.09%
chainlink
Chainlink (LINK) $ 12.97 2.01%
stellar
Stellar (XLM) $ 0.243298 0.30%
sui
Sui (SUI) $ 2.29 0.06%
shiba-inu
Shiba Inu (SHIB) $ 0.000012 0.42%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,006.23 4.82%
usds
USDS (USDS) $ 1.00 0.02%
hedera-hashgraph
Hedera (HBAR) $ 0.168282 0.98%
the-open-network
Toncoin (TON) $ 2.80 1.42%
bitcoin-cash
Bitcoin Cash (BCH) $ 336.41 2.19%
litecoin
Litecoin (LTC) $ 77.87 0.30%
polkadot
Polkadot (DOT) $ 3.72 0.81%
hyperliquid
Hyperliquid (HYPE) $ 16.09 2.72%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.20%
bitget-token
Bitget Token (BGB) $ 4.28 0.52%
pi-network
Pi Network (PI) $ 0.740791 1.13%
ethena-usde
Ethena USDe (USDE) $ 0.998916 0.16%
weth
WETH (WETH) $ 1,674.90 4.90%
whitebit
WhiteBIT Coin (WBT) $ 27.78 0.13%
monero
Monero (XMR) $ 208.67 0.70%
wrapped-eeth
Wrapped eETH (WEETH) $ 1,761.83 4.09%
uniswap
Uniswap (UNI) $ 5.50 3.17%
okb
OKB (OKB) $ 52.90 1.61%
pepe
Pepe (PEPE) $ 0.000008 4.37%
dai
Dai (DAI) $ 1.00 0.06%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 84,332.60 0.63%
aptos
Aptos (APT) $ 4.89 1.10%
ondo-finance
Ondo (ONDO) $ 0.890351 1.58%
gatechain-token
Gate (GT) $ 22.40 0.36%
tokenize-xchange
Tokenize Xchange (TKX) $ 33.66 0.21%
near
NEAR Protocol (NEAR) $ 2.16 0.67%
susds
sUSDS (SUSDS) $ 1.05 0.10%
blackrock-usd-institutional-digital-liquidity-fund
BlackRock USD Institutional Digital Liquidity Fund (BUIDL) $ 1.00 0.00%
crypto-com-chain
Cronos (CRO) $ 0.086683 0.74%
internet-computer
Internet Computer (ICP) $ 4.88 3.68%
ethereum-classic
Ethereum Classic (ETC) $ 15.51 2.41%
mantle
Mantle (MNT) $ 0.691011 1.20%
bitcoin
Bitcoin (BTC) $ 84,429.62 0.76%
ethereum
Ethereum (ETH) $ 1,660.15 4.81%
tether
Tether (USDT) $ 1.00 0.01%
xrp
XRP (XRP) $ 2.14 0.93%
bnb
BNB (BNB) $ 589.47 0.54%
solana
Solana (SOL) $ 131.96 3.19%
usd-coin
USDC (USDC) $ 1.00 0.00%
dogecoin
Dogecoin (DOGE) $ 0.16398 0.74%
tron
TRON (TRX) $ 0.256034 3.53%
cardano
Cardano (ADA) $ 0.644231 0.33%
staked-ether
Lido Staked Ether (STETH) $ 1,657.37 5.01%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 84,280.58 0.49%
leo-token
LEO Token (LEO) $ 9.40 0.09%
avalanche-2
Avalanche (AVAX) $ 20.27 3.09%
chainlink
Chainlink (LINK) $ 12.97 2.01%
stellar
Stellar (XLM) $ 0.243298 0.30%
sui
Sui (SUI) $ 2.29 0.06%
shiba-inu
Shiba Inu (SHIB) $ 0.000012 0.42%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,006.23 4.82%
usds
USDS (USDS) $ 1.00 0.02%
hedera-hashgraph
Hedera (HBAR) $ 0.168282 0.98%
the-open-network
Toncoin (TON) $ 2.80 1.42%
bitcoin-cash
Bitcoin Cash (BCH) $ 336.41 2.19%
litecoin
Litecoin (LTC) $ 77.87 0.30%
polkadot
Polkadot (DOT) $ 3.72 0.81%
hyperliquid
Hyperliquid (HYPE) $ 16.09 2.72%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 1.00 0.20%
bitget-token
Bitget Token (BGB) $ 4.28 0.52%
pi-network
Pi Network (PI) $ 0.740791 1.13%
ethena-usde
Ethena USDe (USDE) $ 0.998916 0.16%
weth
WETH (WETH) $ 1,674.90 4.90%
whitebit
WhiteBIT Coin (WBT) $ 27.78 0.13%
monero
Monero (XMR) $ 208.67 0.70%
wrapped-eeth
Wrapped eETH (WEETH) $ 1,761.83 4.09%
uniswap
Uniswap (UNI) $ 5.50 3.17%
okb
OKB (OKB) $ 52.90 1.61%
pepe
Pepe (PEPE) $ 0.000008 4.37%
dai
Dai (DAI) $ 1.00 0.06%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 84,332.60 0.63%
aptos
Aptos (APT) $ 4.89 1.10%
ondo-finance
Ondo (ONDO) $ 0.890351 1.58%
gatechain-token
Gate (GT) $ 22.40 0.36%
tokenize-xchange
Tokenize Xchange (TKX) $ 33.66 0.21%
near
NEAR Protocol (NEAR) $ 2.16 0.67%
susds
sUSDS (SUSDS) $ 1.05 0.10%
blackrock-usd-institutional-digital-liquidity-fund
BlackRock USD Institutional Digital Liquidity Fund (BUIDL) $ 1.00 0.00%
crypto-com-chain
Cronos (CRO) $ 0.086683 0.74%
internet-computer
Internet Computer (ICP) $ 4.88 3.68%
ethereum-classic
Ethereum Classic (ETC) $ 15.51 2.41%
mantle
Mantle (MNT) $ 0.691011 1.20%