• The US debt ceiling suspension caused the S&P 500 and gold prices to surge ahead, outshining Bitcoin and Ethereum.
• The U.S. Congress decided to increase the government’s borrowing limit to avert potential calamity of defaulting on debt repayments.
• Crypto assets, including Bitcoin and Ethereum, were exhibiting weak correlation compared to traditional stocks like the S&P 500.
US Debt Ceiling Suspension Leads To Shift in Market Dynamics
The recent US debt ceiling suspension led to a remarkable shift in market dynamics. S&P 500 and gold prices surged ahead, outshining Bitcoin and Ethereum. This can be attributed to the U.S. Congress’s decision on 1 June, wherein they opted to suspend the country’s debt ceiling in order to avert defaulting on debt repayments.
Traditional Stocks Outshine Cryptocurrencies
Fascinating insights from Santiment revealed that the decision propelled traditional stocks such as the S&P 500 which reached their highest level since August while gold prices also experienced an upward lift surpassing $1,900 at press time. Meanwhile, cryptocurrencies like Bitcoin and Ethereum were trading at a profit but exhibited weak correlation compared to traditional stocks like the S&P 500.
Bitcoin Price Trend
Bitcoin was experiencing a series of fluctuations but consistently remained below the $30,000 price threshold at press time with a modest gain of over 1%. It was exhibiting a bearish trend as indicated by its Relative Strength Index (RSI) on a daily timeframe.
Ethereum Price Trend
Ethereum was also displaying bearish behavior with its price hovering around $1978 at press time with losses of 0.72%. Its RSI also indicated that it is currently trading in an oversold zone as well as being in an overall downtrend on a daily chart timeframe basis..
The US debt ceiling suspension has had significant impacts on market dynamics resulting in traditional stocks such as those represented by the S&P500 performing better than crypto assets like Bitcoin and Ethereum which are both exhibiting bearish trends based on their RSI values on daily charts