Bitcoin surges 4.5% to $108,000 as debt ceiling talks boost liquidity

Bitcoin's price has recently surged, approaching the $110,000 mark. The cryptocurrency began its ascent from the $105,200 zone, showing significant momentum. However, as it nears the $110,000 resistance level, there are indications that it may face challenges in sustaining this upward trajectory. The consolidation phase suggests that while Bitcoin has made substantial gains, it may struggle to break through the $110,000 barrier without further support.

Bitcoin price remained supported above the $105,000 level and started a fresh increase. BTC cleared many hurdles near $106,200 to start a decent increase. There was a break above a bearish trend line with resistance at $106,300 on the hourly chart of the BTC/USD pair. The pair pumped above the $107,500 resistance level. It cleared the 76.4% Fib retracement level of the downward move from the $108,792 swing high to the $105,116 low. Finally, the price surged toward the $110,000 level. It tested the 1.236 Fib extension level of the downward move from the $108,792 swing high to the $105,116 low.

Bitcoin is now trading above $108,000 and the 100 hourly Simple moving average. On the upside, immediate resistance is near the $109,400 level. The first key resistance is near the $110,000 level. A close above the $110,000 resistance might send the price further higher. In the stated case, the price could rise and test the $112,000 resistance level. Any more gains might send the price toward the $113,200 level.

If Bitcoin fails to rise above the $110,000 resistance zone, it could start another decline. Immediate support is near the $108,750 level. The first major support is near the $108,000 level. The next support is now near the $107,200 zone. Any more losses might send the price toward the $106,500 support in the near term. The main support sits at $105,000, below which BTC might continue to move down.

Technical indicators suggest that the MACD is now losing pace in the bullish zone, while the RSI for BTC/USD is now above the 50 level. Major support levels are at $108,000, followed by $107,200. Major resistance levels are at $110,000 and $112,000.

The proposed increase to the US debt ceiling, often referred to as the 'Big Beautiful Bill,' has sparked discussions among traders about its potential impact on Bitcoin. Some traders believe that the $5 trillion increase could benefit Bitcoin, as it may lead to increased liquidity and investment in the cryptocurrency market. However, the actual impact on Bitcoin's price may not be as straightforward as initially thought. The relationship between government debt and cryptocurrency prices is complex and influenced by various factors, making it difficult to predict with certainty.

Despite the optimism surrounding the debt ceiling increase, caution is advised. The recent surge in Bitcoin's price has been driven by low liquidity, which can be volatile and unpredictable. This situation presents two possible scenarios: either Bitcoin will continue its upward trend, potentially reaching $110,000, or it may face a correction due to the inherent risks associated with low liquidity. Investors and traders should remain vigilant and consider the potential for both positive and negative outcomes.