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Bitcoin (BTC) fell by 3.30% on Wednesday. BTC finished the day at $26,344, giving back its Tuesday gain of 1.39%. Significantly, BTC conducted its first support test at $26,000 since May 12 at that price.

BTC was bearish all day long, dropping from an early high of $27,239 to a low of $26,067 in the middle of the day. To conclude the day at $26,344, BTC breached both the First Major Support Level (S1) at $26,867 and the Second Major Support Level (S2) at $26,491.

The Fed and US Debt Ceiling Issues Send Bitcoin Lower

On Wednesday, there were no crypto-related events to shift the dial. Since there was no cryptocurrency-related news, BTC was at the mercy of the US economic calendar and debt limit negotiations.

Riskier assets suffered as a result of the US administration and Republicans' inability to negotiate a debt limit agreement. The likelihood of a US default increased due to the lack of movement toward a debt limit agreement, which might cause Bitcoin to lose its year-long gains.

The FOMC meeting minutes challenged buyer interest late in the US afternoon.

There were no shocks in the minutes of the FOMC meeting to divert attention away from the debt limit problem. There were no clear cues as to what investors may anticipate in June. Members of the FOMC voiced worries about the debt limit, however.

The likelihood of a 25-basis point Fed interest rate rise in June increased from 28.1% on Tuesday to 36.4%, according to the CME FedWatch Tool. The FOMC meeting minutes did not rule out an interest rate increase in June, with speculation of a move in that month boosted by worries about inflation.

The S&P 500 and Dow both had losses on Wednesday of 0.77 and 0.73 percent, respectively, while the NASDAQ Composite Index dropped by 0.61 percent. The NASDAQ mini was up 195 points this morning.

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