Ether Plunges to $4K as BTC, XRP Tumble Amid Looming U.S. Government Shutdown Crisis
Digital assets face brutal selloff as political gridlock threatens market stability.
Market Meltdown Accelerates
Ethereum leads the carnage, crashing through the $4,000 support level that traders watched like hawks. Bitcoin and XRP join the bloodbath, shedding value as uncertainty becomes the only certainty in Washington.
Shutdown Showdown Spooks Investors
With federal agencies preparing to flip off the lights, crypto markets react faster than politicians can point fingers. The usual safe-haven narrative evaporates faster than a memecoin pump—turns out digital gold still bleeds when traditional systems falter.
Technical Breakdowns Everywhere
Key support levels shattered like congressional promises. Trading volumes spike as panic sets in, proving once again that crypto markets move at light speed while government processes crawl at dial-up pace.
Wall Street's favorite hedge against dysfunction suddenly looks about as reliable as a bipartisan budget agreement—another reminder that when traditional finance catches a cold, crypto gets pneumonia.
BTC, ETH under pressure
Ether fell over 3% in Asia, almost testing $4,000 for the first time Aug. 8, with bitcoin (BTC) falling over 1% to under $112,000. Other major tokens such as XRP (XRP), solana (SOL) and Dogecoin (DOGE) fell by 2.6% to 3%. Solana's SOL appeared set to break below $200.
The CoinDesk 20 Index was down 2% at 3,940 points. Meanwhile, futures tied to the S&P 500 and Nasdaq, traded flat to positive.
Although the exact cause of the cautious crypto market sentiment was not clear at the time of writing, growing concerns about a potential government shutdown may have contributed to the risk-averse mood among investors.
Furthermore, overnight comments from San Francisco Fed President Mary Daly reiterated her support for further rate cuts, but declined to provide a timeline, instead stressing data dependence, which may have hurt sentiment.
The Fed cut rates by 25 basis points on Sept. 17 while hinting at two more rate cuts by the year's end. Since then, policymakers, including Chairman Jerome Powell, have signaled a cautious approach to future rate cuts.
Seven Fed officials, including the New York Fed's Williams, are scheduled to speak on Thursday. Meanwhile, traders are awaiting Friday's PCE data, the Fed's preferred measure of inflation.
"If inflation pressures appear contained, markets may interpret this as room for further Fed cuts, providing liquidity tailwinds into Q4. That could be the catalyst for BTC to attempt a long-anticipated breakout," the market insights team at Singapore-based QCP Capital said.
