cryptonews

The risk of a US government shutdown is back in focus and this time, markets aren’t ignoring it.
When federal operations slow down or halt, it doesn’t just affect public services. It disrupts data releases, regulatory oversight, and market certainty all of which matter deeply to risk assets.
For crypto, the implications are subtle but important.
Why a US Shutdown Matters for Crypto
▪️ Delayed Economic Data
Inflation, employment, and macro indicators often get postponed. Less data = more uncertainty.
▪️ Regulatory Pause
Agencies slow down. Crypto enforcement, approvals, and oversight temporarily lose momentum.
▪️ Liquidity Shifts
Uncertainty pushes capital toward alternative assets — historically, Bitcoin benefits from this narrative.
▪️ Confidence vs Control
A shutdown highlights how dependent traditional systems are on centralized governance — strengthening the long-term case for decentralized finance.
Market Perspective
This isn’t an instant “bullish event.”
It’s a macro stress signal.
Short term → volatility
Medium term → narrative support for BTC and crypto as non-sovereign assets
Markets don’t react to fear alone — they react to structural weakness.
The Bigger Picture
Crypto doesn’t win because governments fail.
It gains relevance when trust in traditional systems gets tested.
A shutdown is temporary.
The questions it raises are not.
Do you see US political uncertainty as a short-term risk or a long-term tailwind for crypto?
— AFx_Crypto
#CryptoNews #TrendingTopic

Bitcoin (BTC) continued its multi-month sell-off on Monday, sliding toward the $77,800 area as global markets undergo a broad repricing of liquidity. The renewed downside pressure has spread well beyond crypto, affecting equities and precious metals alike, and has eroded the “safe-haven” narrative that supported certain assets earlier this year.
The latest leg down follows persistent institutional outflows. According to CoinShares, global crypto investment products recorded $1.7 billion in net outflows last week alone. Bitcoin spot ETFs were responsible for a large share of the decline, shedding $1.6 billion in January, making it one of the weakest months on record for ETF flows.
Market structure data further underscores the severity of the downturn. Bitcoin has now closed lower for four consecutive months, a pattern not seen since 2018, while January marked BTC’s weakest start to a year since 2022.
A Macro-Driven Reset, Not a Crypto-Specific Shock
Analysts increasingly agree that the current correction is macro-driven, rather than the result of internal crypto market failures.
Timothy Misir, Head of Research at BRN, described the final week of January as a decisive global shift toward risk-off positioning. The nomination of Kevin Warsh as a potential future Fed Chair, combined with stronger-than-expected US Producer Price Index (PPI) data, forced markets to rapidly reprice financial conditions.
In crypto, this macro shock was amplified by ETF outflows, miner selling pressure, and broad deleveraging across risk assets.
Notably, the adjustment has not been confined to digital assets. Gold has fallen nearly 7% from its late-January highs, while silver has dropped sharply, reflecting reduced risk appetite and tighter USD liquidity.
QCP Capital noted that even traditional safe havens have come under pressure, as higher margin requirements triggered forced position reductions in futures markets.
Derivatives Market Magnifies Volatility
Crypto markets have absorbed the liquidity shock with greater intensity than traditional assets.
Bitcoin briefly dropped to $74,500 earlier this week, representing a decline of over 20% from its mid-January peak. During the same period, spot Bitcoin ETFs saw $1.49 billion in weekly net outflows, while Ether-related funds lost $327 million, marking a broad-based ETF drawdown.
Derivatives data reveals significant deleveraging. According to analyst Samer Hasn (XS.com), total open interest in crypto futures has collapsed to around $109 billion, down more than 53% from its all-time high.
Bitcoin futures open interest alone has fallen to roughly $52 billion, a 44% decline from peak levels.
This reset coincided with one of the largest long-liquidation events since October, totaling nearly $5 billion over six days, with Bitcoin futures accounting for approximately $1.7 billion.
On-Chain and Technical Signals Deteriorate
On-chain indicators point to further fragility. Misir noted that Bitcoin is now trading below multiple short-term cost bases, placing many recent buyers underwater and increasing the risk of additional sell pressure.
At the same time, miners continue to move BTC onto exchanges, adding supply during a period of declining liquidity.
From a technical perspective, Bitcoin left a large bearish CME futures gap earlier this week—one of the most significant downside gaps on record. The unfilled zone between $78,000 and $84,560 is now being closely watched as a potential price magnet should a technical rebound occur.
Meanwhile, Ether and major altcoins have slid to multi-month lows, pushing total crypto market capitalization down to approximately $2.7 trillion.
Whale Accumulation and Long-Term Outlook Remain Constructive
Despite the short-term pressure, some analysts caution against extrapolating the current weakness too far.
Hasn highlighted that large wallets appear to be accumulating during the decline. On-chain data shows addresses holding 1,000–10,000 BTC climbing back toward recent highs—a notable divergence from prior sell-offs.
From a longer-term perspective, analysts at Bernstein argue that the current phase resembles a cyclical bear market rather than the start of a prolonged “crypto winter.” They project a potential market inflection toward late 2026, with Bitcoin possibly forming a macro bottom near $60,000, once forced selling subsides and macro conditions stabilize.
For now, markets remain in a “reset phase”, where liquidity—not narratives—dominates price action, according to BRN.
This article is for informational purposes only and reflects personal market observations. It does not constitute investment advice. Readers should conduct their own research and assume full responsibility for any investment decisions.
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