Bitcoin, Crypto Market Crash Looming In June After Debt Ceiling Saga: Bloomberg

Positive sentiments started to appear in the global stock and crypto markets after the US House and Senate passed the Biden-McCarthy Debt Ceiling Deal and the U.S. Federal Reserve looking to “skip” interest rate hike in June.

The stock markets closed Friday on a positive note, with Dow Jones 2.1% higher, the S&P 500 added 1.4%, and the Nasdaq gained almost 1%, topping the April 2022 highs. Moreover, the May jobs report came mixed showing hotter-than-expected payrolls, unexpectedly higher unemployment, and a slowdown in annual wage growth.

However, the challenges for the markets are not over, especially for risky assets such as cryptocurrencies. The US Treasury Dept will rebuild its depleted cash balance by issuing an estimated $1 trillion in Treasury bills after the debt ceiling deal.

Citigroup strategists predict Bitcoin (BTC) and Ethereum (ETH) near-term outlook remains bleak as cash reserves in the Treasury General Account fell to $22.89 billion on June 1 from $635.99 billion in March. Crypto assets are vulnerable to higher volatility and weaker returns. Over $1 trillion T-bills sales by the end of the third quarter will drain US dollar liquidity from the financial market, increasing the risks of a recession.

Fiona Cincotta, senior market analyst at City Index said Bitcoin’s support is around $26,500 and a break below $25,000 could result in a crash.

“The problem is the macro backdrop, which is relatively uncertain going forward with recessionary fears. I think what will be looking for to make Bitcoin shine is a nice dovish pivot from the Federal Reserve. That might be the tide where we will see another decent leg higher.”

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Bitcoin and Ethereum Price To Fall Massively in June

Bitcoin and Ethereum prices continue to move in a range for the last 30 days due to macro factors, regulatory challenges, and weak technical charts. Also, Bitcoin price risks falling below the key 200-weekly moving average (WMA).

The US treasuries and US dollar have started to move higher, with DXY moving over 104 again. It rose after the Senate passed the debt ceiling deal and President Biden prepares to sign on June 3.

BTC price currently trades near $27,150, moving sideways in the past 24 hours. ETH price jumped above $1900 but remains under selling pressure.

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