Bitcoin’s subsequent important worth catalyst could arrive this Friday as the US debt suspension interval involves an finish, doubtlessly injecting contemporary liquidity into markets and driving a worth rebound.
The US Treasury hit its $36 trillion debt ceiling a day after President-elect Donald Trump’s inauguration on Jan. 20. Treasury Secretary Janet Yellen announced a “debt issuance suspension interval” starting Jan. 21, which is about to final till March 14, in line with a letter revealed on Jan. 17.
Bitcoin (BTC) has dropped 22% through the two-month debt suspension plan, from over $106,000 on Jan. 21 to $82,535 on the time of writing on March 12, TradingView knowledge exhibits.
BTC/USD, 1-day chart since Debt suspension plan. Supply: Cointelegraph/TradingView
The resumption of presidency spending will convey a liquidity increase that will catalyze Bitcoin’s subsequent rally, in line with Ryan Lee, chief analyst at Bitget Analysis.
“With in-hand money, the demand for monetary property akin to shares and crypto can enhance, and there could also be a aid from ongoing volatility,” the analyst advised Cointelegraph. “In such durations, we are able to anticipate a lift within the general momentum, though many different elements are necessary to notice.”
Past international tariff uncertainty, “issues akin to inflation, rates of interest and geopolitical points stay unresolved,” Lee added.
Contemplating that the debt suspension ends simply two weeks after the White House Crypto Summit, a portion of the brand new liquidity could circulation into cryptocurrencies, in line with Aleksei Ponomarev, co-founder and CEO of crypto index investing agency J’JO.
“Surges in liquidity have sometimes benefited Bitcoin and threat property, and the top of the US debt suspension will likely be no completely different,” he advised Cointelegraph, including:
“Whereas the liquidity surge will undoubtedly drive market worth motion, it's restricted to short-term impression. The long-term trajectory of Bitcoin is, and stays, tied to institutional investments, ETF development and regulatory readability and implementation.”
GMI Whole Liquidity Index, Bitcoin (RHS). Supply: Raoul Pal
Nonetheless, Bitcoin’s right-hand facet (RHS), which marks the bottom bid worth somebody is prepared to promote the foreign money for, should face a possible correction to close $70,000 till the top of the debt suspension interval on Friday, based mostly on its correlation with the worldwide liquidity index.
Nonetheless, the rising cash provide may push Bitcoin price above $132,000 earlier than the top of 2025, in line with estimates from Jamie Coutts, chief crypto analyst at Actual Imaginative and prescient.
BTC projection to $132,000 on M2 cash provide development. Supply: Jamie Coutts
Associated: Bitcoin may benefit from US stablecoin dominance push
Bitcoin worth nonetheless restricted by international commerce battle issues
Whereas extra international liquidity is an optimistic signal for Bitcoin, the world’s first cryptocurrency stays restricted by international commerce tariff issues, in line with James Wo, the founder and CEO of enterprise capital agency DFG:
“Whereas some could argue that retaliatory measures from tariff-imposed international locations had been already priced in, tariffs have a delayed financial impression past their preliminary announcement.”
“Greater import prices and diminished company margins are more likely to push inflation larger, forcing central banks to maintain rates of interest elevated for longer beneath a restrictive financial coverage,” he added.
This will additionally tighten liquidity circumstances, making threat property akin to Bitcoin “much less enticing within the brief to medium time period,” Wo mentioned.
Associated: Bitcoin reserve backlash signals unrealistic industry expectations
The European Union launched retaliatory tariffs on March 12, threatening a Bitcoin correction below $75,000 within the brief time period. This will happen quickly as a result of Europe accounting for over $1.5 trillion of annual US exports.
Regardless of the short-term correction issues, most analysts remained optimistic about Bitcoin’s worth trajectory for late 2025, with worth predictions ranging from $160,000 to above $180,000.
Journal: SCB tips $500K BTC, SEC delays Ether ETF options, and more: Hodler’s Digest, Feb. 23 – March 1
