Market Rebound Fueled by Shutdown Resolution
Bitcoin has extended its powerful rebound, holding around $106,000 as of Monday. After weeks of choppy consolidation, crypto markets gained a clear catalyst: the official end of the U.S. government shutdown. Late Sunday night, the U.S. Senate approved a bipartisan spending package by a 60–40 margin, which the House of Representatives passed shortly after. President Donald Trump signed it into law on Monday morning, officially reopening federal agencies after more than 40 days of paralysis. The resolution marks the longest shutdown in modern U.S. history, finally removing a key political overhang that had weighed on sentiment for over a month. In response, traders poured back into risk assets — Bitcoin surged more than 4% intraday, leading a rebound across digital assets and tech equities alike.
Background: The U.S. Government Shutdown
The shutdown began on October 1, when Congress failed to pass a new appropriations bill for the 2025 fiscal year. In the U.S. system, such a bill authorizes all federal spending — including government salaries, social programs, and essential public services. Without it, the government “runs out of legal authority to spend money.” At the center of the dispute was a fight over Affordable Care Act (ACA) tax credits. Senate Democrats insisted on extending health-insurance subsidies for low- and middle-income families, while Republicans — controlling both the House and the White House under President Trump — rejected the inclusion of these provisions, pushing instead for stricter budget discipline. Neither side compromised before the fiscal deadline, triggering the shutdown and forcing hundreds of thousands of federal workers into unpaid furloughs.
The Resolution and Market Response
The breakthrough came this weekend as Senate leaders reached a deal on a continuing resolution (CR) combined with several full-year funding measures. The bill ensures government operations are funded through January 2026, restoring federal pay, food assistance programs, and other critical services. Markets quickly reacted to the clarity:
- •Bitcoin jumped above $106K, marking its strongest close since mid-October.
- •U.S. equities opened higher, and Treasury yields edged lower as investors rotated back into risk assets.
- •Polymarket prediction odds for “shutdown ending” hit 100% immediately after Trump’s signature confirmed the deal.
Analysts describe this move as a “relief rally” — a release of pent-up optimism after weeks of policy uncertainty that had restrained liquidity and trading volumes.
Short-Term Relief, Long-Term Questions
While the shutdown’s end restores stability, its long-term economic and market impact remains to be seen. Fiscal operations have resumed, but broader macro conditions — from real yields to global liquidity — still dictate Bitcoin’s trajectory. Institutional inflows into Bitcoin ETFs have started to recover modestly, reflecting renewed confidence. Yet, experts caution that sustained upside requires more than political relief:
- •stronger inflows into U.S. spot ETFs,
- •easing monetary policy or rate-cut expectations
- •a rebound in global risk sentiment.
In short, the shutdown’s resolution removes a major overhang, but the next phase for Bitcoin depends on structural fundamentals — not headlines.
Looking Ahead
With Washington back to work, markets may enjoy a short-lived period of calm — but caution still dominates. Although the end of the U.S. shutdown has lifted political uncertainty, Bitcoin’s rebound remains technically fragile. The rally toward $106K reflects relief more than renewed conviction. In reality, the broader environment remains tight:
- •The December rate-cut outlook has turned less optimistic, with the Fed still signaling caution on inflation.
- •Market sentiment is skewed — positive news struggles to drive sustained rallies, while negative headlines, such as DeFi project liquidations following the October 11 shock, continue to trigger outsized reactions.
- •On-chain liquidity and risk appetite have yet to show signs of full recovery.
Therefore, while traders welcome this policy clarity, the road to new highs still requires a deeper base-building phase. Bitcoin may need to retest lower supports before establishing a durable uptrend. For now, prudence remains the key strategy — short-term optimism should not obscure the longer process of rebuilding market confidence and structural liquidity. In short: the shutdown’s end removes one uncertainty, but the real bottom-forming cycle for Bitcoin may still be ahead.