A visual representation of the digital cryptocurrency Bitcoin is displayed in front of a chart of the Bitcoin exchange rate in Paris, February 9, 2021.

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Bitcoin briefly recovered the $28,000 level over the extended holiday weekend for the first time since the beginning of the month after the Biden administration reached a tentative deal with Republican lawmakers to address the U.S. debt ceiling.

The crypto market leader rose 1% on Tuesday to $27,911.99, according to Coin Metrics. Ether was slightly more than 1% higher at $1,910.75.

On Monday, Bitcoin rose to $28,461.45, while Ether hit a high of $1,928.16.

Cryptocurrencies began rising on Saturday night after House Republicans reached a tentative deal with the White House to raise the nation’s debt ceiling and avoid bankruptcy. Congress is scheduled to vote on the legislation as early as Wednesday.

“The past few days have seen intense volatility as BTC fell to a trading low of around $25,800 on Wednesday due to investor concerns [the] The US is reaching its debt ceiling,” said Matteo Greco, an analyst at investment firm Fineqia International.

Bitcoin and Ether rose the next day.

“However … This means that in the medium term, money is being moved away from riskier assets to buy government bonds. The consequence could be a further slowdown in volumes and liquidity for the equity and digital asset markets, with a potentially negative impact on prices,” Greco added.

As debt ceiling talks weighed on crypto investors last week, minutes from the Federal Reserve’s latest meeting also showed that central bank officials are split on where to go with interest rate hikes. With both factors, Bitcoin has once again started to behave like a risk asset, just as it started trading more in tandem with gold earlier this year.

Bitcoin is now testing its March resistance level of around $28,800, said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank.

Bitcoin and Ether are on pace for their worst month since November, down 5% and up less than 1% respectively. Bitcoin is on pace for its first negative month in 2023.

For the quarter, Bitcoin was down 2% after ending the first quarter with a 71% gain. Ether rose 4.4% after posting a 52% gain in Q1.


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