Bitcoin and most cryptocurrencies were deeply in the red on Wednesday.
The same was true in the stock market, where the Dow Jones and Nasdaq retreated.
Several altcoins like ARPA, CREAM, IRIS, and Waves soared.
Cryptocurrencies and stocks slumped hard on Wednesday as concerns about the debt ceiling continued. Bitcoin remained below the support at $27,000 while the Dow Jones and the Nasdaq 100 indices retreated by more than 1%. Safe havens like the US dollar index (DXY) jumped.
Debt ceiling crisis continues
The main catalyst for the ongoing sell-off in the stocks, commodities, and cryptocurrencies market is the ongoing debt ceiling issue. Democrats and Republicans have failed to reach an agreement on how to handle the crisis.
Therefore, there are concerns that the two sides will not reach an agreement before the June 1 deadline. However, most analysts and experts in negotiations believe that these talks will go to the wire as the two sides seek concessions.
A default of the American government would have a major implication around the world since it holds over $31 trillion in debt. It would lead to a major crash of key assets like stocks and bonds. Also, it would lead to a jump in the unemployment rate.
The soaring US debt is one reason why many people allocate their cash to safe havens like gold and Bitcoin to a small extent. However, historically, these assets tend to drop when there is an elevated risk. For example, BTC and gold plunged in March 2020 as the world was moving into lockdown.
Several altcoins are rising
Not all cryptocurrencies are slipping. Data compiled by Binance shows that ARPA price has jumped by over 74% in the past 24 hours, making it the best performer in the industry. This rally happened as the token trended in key social media platforms like Twitter and StockTwits. There is a likelihood that the developers will launch the mainnet soon.
CREAM, the token for Cream Finance, jumped by more than 15% while Bella Protocol jumped by 12%. PIVX and IRIS prices jumped by more than 10% in the past 24 hours. The parabolic moves of most of these tokens was not driven by any news in the ecosystems. It also happened in a low-volume environment, signaling that it could be part of a pump and dump.
Meanwhile, Waves price drifted upwards after an association of South Korean exchanges removed it from a cautionary list. As a result, several exchanges decided to restart offering the coin. Also, the platform partnered with Pyth Network, an oracle platform that competes with Chainlink.
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Meet our new partners @PythNetwork, who will be providing real-time pricing for our new oracles. Over 200 different assets in their account, can you imagine the power?
— Tsunami Exchange 🌊 (1 ➝ 2) (@ExchangeTsunami) May 24, 2023
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