Bitcoin (BTC-USD) reclaimed the $27,000 (£21,547) mark amid investor concerns over the US debt ceiling debate and liquidity issues in cryptocurrency markets.
Bitcoin was trading at $27,350 on Tuesday, according to data from Coingecko.
After falling below $26,000 on Friday, bitcoin remained below $27,000 on Sunday night.
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Edward Moya, senior market analyst at forex market maker Oanda, said the upcoming debt ceiling debate in the United States could reveal whether investors see bitcoin as a safe haven.
"Bitcoin looks set to remain constrained, but if risk aversion leads to a moment of risk aversion, we could see continued selling pressure below last week's low," Moya wrote in a rating. .
President Joe Biden plans to discuss the debt ceiling with congressional leaders at the White House on Tuesday amid warnings that the US Treasury may run out of cash to keep paying the country's debt past June 1.
Liquidity issues in the cryptocurrency market
Crypto investors are pricing in the drop in liquidity in the cryptocurrency market, which was caused by market makers like Jane Street and Jump Crypto pulling out of cryptocurrency trading in the United States last week in a context of increasing regulatory scrutiny.
A Monday report from crypto data firm Kaiko showed a 4% decline in bitcoin market depth, an indicator of liquidity conditions, over the past month, while ether (ETH-USD) is down. down 2%. The report found that altcoin liquidity was even tougher, down nearly 17% month-over-month.
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Market liquidity refers to the ease with which assets or securities can be bought or sold without significant price changes.
Data from CryptoQuant showed bitcoin reserves fell across all cryptocurrency exchanges on Monday, indicating investors are pulling more digital assets from exchanges, reducing the supply of liquidity, indicating possible appreciation in value. short term.
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This article originally appeared on Yahoo Finance UK at https://uk.finance.yahoo.com/news/bitcoin-price-crypto-cryptocurrency-ethereum-low-liquidity-trading-090740365.html