Bitcoin Price Volatility Spikes as US Government Shutdown Looms – Crypto Markets on Edge

Bitcoin whipsawed violently following the US Congress' failure to pass a spending bill, dropping 8% before recovering half its losses within hours. The flagship crypto's 24-hour trading volume surged 150% as traders scrambled to reposition.

Market analysts note BTC is increasingly reacting to macro shocks like a risk asset—despite proponents' 'digital gold' claims. 'When traditional markets sneeze, crypto gets pneumonia,' quipped one hedge fund manager, referencing Bitcoin's amplified volatility compared to S&P 500 moves.

The shutdown threat comes amid surging institutional interest, with BlackRock's spot BTC ETF seeing record inflows. Some traders see the dip as a buying opportunity, while others warn of cascading liquidations if $25K support breaks. As always in crypto—buckle up.

In Brief

• The U.S. Senate adopts a temporary funding bill, initiating the end of the longest shutdown in U.S. history.
• Bitcoin jumps 6.7 % to exceed $106,000, driven by renewed investor confidence amid political easing.
• Over one million U.S. federal employees are affected, particularly in key agencies like the SEC and CFTC, partially paralyzing crypto regulation.
• The $BTC hashtag trends on social media, signaling a massive return of media and community attention around crypto.

Bitcoin’s rebound coincides with a U.S. political breakthrough

On Monday, after several weeks of institutional paralysis, the U.S. Senate passed a temporary funding bill aimed at ending the longest government shutdown in U.S. history.

U.S. Senate votes to end government shutdown, 60-40.

Goes now to the U.S. House of Representatives. pic.twitter.com/r8NsgB7Fqi

The announcement immediately echoed in the markets, especially in bitcoin’s market. “Once adopted, the provisional funding bill is sent to the House for a vote before reopening. Hopefully, we will be open by Wednesday”, said Republican Senator Markwayne Mullin on X.

🚨 VOTING NOW: on FINAL Senate passage to end the Schumer Shutdown and reopen the federal government.

After passage, the CR goes to the House for a vote before we reopen.

Hopefully, we’re open by Wednesday. pic.twitter.com/yNNX4j7y0u

The bill received the necessary 60 votes, including eight from the Democratic camp, after about ten hours of negotiations. The ball is now in the House of Representatives’ court, before potential final approval by President Donald Trump.

The shutdown caused significant disruptions across the country, with direct impacts on several key institutions related to financial regulation and infrastructures :

• Over one million unpaid federal employees, including in market regulatory bodies like the SEC (Securities and Exchange Commission) and the CFTC (Commodities Futures Trading Commission), whose teams were significantly reduced ;

• Partial paralysis of crypto sector oversight, these regulators being crucial for ongoing cases related to Bitcoin ETFs, centralized exchanges, and DeFi projects ;

• Disorganization of air traffic, with a shortage of unpaid air traffic controllers leading to massive cancellations and delays in U.S. airports ;

• A narrowly avoided systemic risk, in a context where market confidence was undermined by budget deadlock.

In this tense climate, the Senate adoption of the bill was seen as a strong signal of a return to stability, encouraging investors to reposition on bitcoin, often viewed as an alternative asset in times of institutional uncertainty.

A resumption of social momentum and bullish signals : bitcoin recovers lost ground

The market reaction quickly followed the political signals. Over the weekend, amid speculation about an imminent resolution of the shutdown, the bitcoin price, which had dropped to $99,300 on Friday, surged 6.7% to around $106,000.

This performance was accompanied by a massive resurgence of attention on social networks. According to blockchain analytics platform Santiment, “$BTC” has become the most mentioned crypto term again in recent days.

Beyond the simple price movement, this bitcoin comeback is supported by strong fundamental signals. Santiment highlights a global renewed optimism, fueled by analysts’ forecasts suggesting a possible bullish scenario toward $150,000 by year-end.

Moreover, adoption is progressing in payments. Giant Square now enables more than 4 million merchants to accept bitcoin with no fees. This decision is seen as a turning point in the concrete integration of crypto into the real economy.

Bitcoin’s recovery, catalyzed by the American political context, reminds us how sensitive the crypto market remains to macroeconomic signals. If the current trend continues, the next technical resistances could be tested soon, under the watchful eye of a market now focused on the continuation of budget negotiations.

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