The end of the US federal government shutdown could spark unexpected turbulence in the crypto markets. As traditional investors regain risk appetite, Bitcoin faces funding pressures jeopardizing its liquidity. Technical signals are accumulating, signaling a decisive test for the world's leading cryptocurrency.
The imminent end of the federal shutdown has triggered a massive move toward risky assets across financial markets. US stock indices have bounced back, with the S&P 500 gaining nearly 2% in just a few sessions. This bullish momentum typically benefits Bitcoin, which is considered a risk asset by the majority of institutional investors.
However, beneath this apparent euphoria lies a more concerning reality for the crypto market. Trading volumes on major exchanges have dropped 35% over the past three weeks, signaling a gradual drying up of liquidity. This situation stems from the withdrawal of several major market makers who have reduced their exposure following persistent regulatory tensions.
Bitcoin is currently trading in a critical zone between $103,000 and $108,000. Order books indicate shallow market depth, meaning a large order could trigger violent price movements in either direction. Experienced traders are closely watching the support level at $100,000, whose break could trigger a cascade of liquidations.
The derivatives market reveals growing tension: Funding rates on perpetual contracts are hovering around zero or even turning negative, signaling a lack of bullish conviction. Open interest has reached $28 billion, creating considerable over-leverage risk. The futures curve shows limited contango, indicating that institutions don’t expect significant short-term gains.
Beyond the shutdown, Federal Reserve monetary policy remains central for BTC. The latest FOMC minutes indicate that rate cuts aren’t expected before the second half of the year, maintaining downward pressure on risk assets. Flows into US spot Bitcoin ETFs show signs of exhaustion with net outflows over five of the past seven sessions, as institutional investors rebalance their portfolios toward government bonds and value stocks.
Launch your BTC bot like 100,000 professional traders and try to win 1,000 USDT!
Pionex automates Bitcoin trading to capture market movements without constant monitoring.
Related articles:
Passionate about cryptocurrencies since 2019, I cover the latest news through clear and accessible articles. My goal is to make crypto understandable for everyone, with reliable and well-researched content.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
