Cryptos rebound; Bitcoin, at $27,200 and worried about the debt ceiling

There´s been a rebound in the cryptocurrency market. Bitcoin (BTC) has currently dropped 0.3%, but has gained nearly 2% in the last 24 hours and is up above $27,200. For its part, Ethereum (ETH), follows the same trajectory: right now it falls, but the rises of the last 24 hours are close to 3% and place it above $1,855.

"Bitcoin remains in consolidation and choppy day-to-day since breaking below $27,000. The break itself was quite a bearish signal but once more we've seen some resilience from cryptos," stated Craig Erlam, senior market analyst at Oanda. All in all, the expert stresses that the cryptocurrency reigns trend "is still very negative" and a "deeper" correction is "possible". "The next big test below could be $25,000," he commented.

This same thesis is defended by Javier Molina, senior market analyst at eToro, who believes that BTC continues to put pressure on the support delimited by $26,500-$26,800. "If this zone is lost, we´d go directly to $25,000. This level is very important and should not be lost because if it is, the succession of rising highs and falling lows would be broken and $23,500 would be the first of the bearish targets. On the upside, and if $26,800 holds, $28,500 marks the resistance to beat before going for the highs of the year," he added.

Meanwhile, Naeem Aslam, chief investment officer at Zaye Capital Markets, thinks investor enthusiasm is waning as the market's two main cryptos lose ground. "Bitcoin is headed in the direction of having one of its worst monthly performances of this year, and Ethereum is following in Bitcoin's footsteps by heading in the same direction," he explained.

"Bitcoin is its own unique beast and has the ability to increase by more than 10% in a single day without experiencing any difficulties. However, such an event has not occurred with Bitcoin for quite some time, which is beneficial to the general investing narrative around Bitcoin since some investors have always been scared of the cryptocurrency's volatility," commented Aslam.

On the broader scene, the market is still closely watching the negotiations on raising the US debt ceiling. Biden and McCarthy, Democrats and Republicans, closed Monday without reaching an agreement and with a promise to continue negotiating to avoid a historic default. Since 1960, the U.S. government has raised the debt limit 78 times, but the current tense and election-heavy political environment is conditioning the negotiators' stance.

"At this point, all that we are receiving from politicians is simply their politics, in which they continue to toy with the future of the United States of America with the verbiage that they use. In spite of the fact that they continue to utilise a more political tone by claiming that more progressive work has been done, the needle does not move," explained Aslam, who believes investors are worried the situation will drag into June, when the U.S. government will have very little money left to pay for its obligations.

"If this drama continues the way that it is going and we think that it is going to be the case, then we think it will hurt the US status as safe haven further. Nevertheless, investors are aware that the debate over the debt limit is a spectacle that politicians like, and the likelihood that investors would lose faith in the ability of the United States government to pay its debts is quite low," Aslam concluded.

In other market news, altcoins mimic Bitcoin's movements. The 3% rises in the last 24 hours for polygon (MATIC) are particularly noteworthy.