Bitcoin and Ether Dip as Shutdown Looms
Crypto prices faced continued pressure on Yesterday, with a partial U.S. government shutdown injecting further uncertainty into an already fragile market. Bitcoin was trading at approximately $83,559, reflecting a 1 percent increase for the day, yet showing a nearly 7 percent drop over the week. Meanwhile, ether and XRP experienced significant weekly downturns as well. The recent brief shutdown, occurring alongside thin weekend liquidity, is serving more as a sentiment stress test rather than an economic shock. This has led to smaller positions and more cautious dip-buying throughout the crypto markets.
Crypto prices remained under pressure on Yesterday as the U.S. government faced a partial shutdown following lawmakers’ failure to meet a midnight funding deadline, introducing yet another layer of uncertainty to a market that has been grappling to attract bids. Bitcoin is currently trading at approximately $83,559, reflecting a 1% increase for the day, although it has seen a decline of about 6.8% over the past week, as indicated. Ether is currently positioned around $2,686, reflecting a decline of approximately 1.9% over the last 24 hours and a 9% drop for the week. XRP traded at approximately $1.72, reflecting a decline of around 1.6% for the day and nearly 10% lower over the past week. The shutdown appears to be brief.
The Senate has approved a funding package; however, with the House out until Monday, the government is set to experience a technical lapse over the weekend. The timing is crucial for risk assets as it coincides with thin weekend liquidity and a busy headline cycle, potentially putting pressure on bitcoin and the wider crypto market throughout the weekend. There is a distinct crypto perspective here that goes beyond merely being “risk off.” In the last 24 hours, prediction markets have illustrated the complexities surrounding the definition of “shutdown.”
Traders had to adopt a legal mindset. The government can be “shut” on paper at 12:01 a.m. and still appear normal to the majority for two days. The disparity between legal status and actual effects is precisely where the language of contracts and the regulations surrounding settlements begin to take effect. The shutdown headline serves more as a stress test for sentiment in the crypto space rather than a direct economic shock. Traders remain on high alert, opting for smaller position sizes, as dips feel more significant with buyers hesitant to engage ahead of weekend news developments.
