Bitcoin (BTC) and most of the crypto market witnessed a move to the downside as the US dollar registered its strongest week in months.
The US dollar index (DXY) rose 0.6% on Friday and 1.44% in the past 5 days, according to MarketWatch.
The DXY also crossed above its 50-day simple moving average (SMA) after trading below the key technical indicator since March.
Bitcoin, meanwhile, dropped 2.42% in the past 24 hours and nearly 10% in the past week. The top-ranked crypto asset by market cap is trading at $26,889 at time of writing.
Equities also went down this week, with the S&P 500 Index down 0.16% in the past day and 0.44% in the past five days.
The retracements seen in risk-on assets such as stocks and crypto come amid the US government’s upcoming debt ceiling face-off.
Last month, House Republicans passed a bill to raise the debt ceiling by $1.5 trillion, on the condition that President Joe Biden also signs off on deep spending cuts.
Biden, however, reportedly said that he will not engage in spending negotiations that are married to the debt ceiling, which currently sits at $31.4 trillion.
On Tuesday, the President reportedly met with Speaker of the House Kevin McCarthy, Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell in the White House to talk about the issue, though they made little progress in negotiations.
A follow-up meeting scheduled for Friday was postponed until next week, NBC News reports.
Earlier this week, U.S. Treasury Secretary Janet Yellen warned that the US will tumble into an “economic calamity” if Congress fails to raise the debt ceiling. She also projected that the government will run out of cash sometime in early June if the debt ceiling issue isn’t dealt with.
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