$36T debt ceiling may lead to Bitcoin price correction
The U.S. debt ceiling is poised to impact Bitcoin's (CRYPTO:BTC) market trajectory as it approaches $36 trillion, coinciding with President-elect Donald Trump’s inauguration on January 20.
Treasury Secretary Janet Yellen announced a debt issuance suspension period starting January 21, lasting until March 14.
This suspension could indicate a reduction in global liquidity, raising concerns about Bitcoin's price stability.
Despite reaching an all-time high of over $109,000 on January 20, analysts predict a potential correction to around $70,000.
Raoul Pal, founder of Global Macro Investor, noted that Bitcoin may experience a local top above $110,000 in January before facing a significant pullback due to tightening liquidity.
“Bitcoin could fall below $70,000 by February,” he stated.
However, not all experts share this pessimistic view.
Marcin Kazmierczak, co-founder of Redstone, suggested that Bitcoin's correlation with traditional markets during previous debt ceiling disputes has been mixed.
“The key factors to watch will be institutional behavior and whether this situation triggers broader market uncertainty,” he remarked.
Alvin Kan, COO of Bitget Wallet, cautioned that volatility in traditional markets might spill over into the crypto market.
He explained that this could create a risk-off environment affecting Bitcoin negatively.
Looking ahead, global liquidity is expected to rise after March 14, which could positively influence Bitcoin’s price trajectory for the remainder of 2025.
Jamie Coutts, chief crypto analyst at Real Vision, projected that the global M2 money supply is likely to peak by January 26, 2026.
This increase in liquidity could potentially drive Bitcoin's price above $132,000 by the end of 2025.
VanEck analysts have even suggested that Bitcoin might reach $180,000 after an anticipated correction in early 2025.
At the time of reporting, the Bitcoin (BTC) price was $102,948.
