Crypto Markets Brace as Another Partial U.S. Government Shutdown Looms Next Week

The crypto market faces another partial U.S. government shutdown risk, with a shutdown likely to happen by next week. This comes just less than a week after Trump signed a funding bill that ended a partial shutdown that began on January 31.

Crypto Market On Alert As Another Partial Shutdown Looms

The crypto market could face another wave of volatility as crypto traders increase bets on the likelihood of another shutdown next week. Polymarket data shows a 66% chance of another government shutdown by February 14.

This comes just days after the U.S. House passed a funding bill that ultimately ended the government shutdown that began on January 31. However, the funding bill included only funding for the Department of Homeland Security (DHS) through February 13, which is why another partial shutdown looms.

Bitcoin began its recent crash at the start of the January 31 government shutdown, dropping below $80,000 that day. Meanwhile, BTC and the broader crypto market briefly recovered earlier this week after the shutdown ended.

As such, another government shutdown could again impact crypto prices. Crypto analyst Crypto Tice stated that another shutdown could be bearish for crypto, noting that a shutdown risk could pull liquidity from markets, causing risk assets to bleed.

Meanwhile, amid this week’s shutdown, market expert Raoul Pal expressed his concerns about the current liquidity crisis in the United States due to the government shutdown. He stated that the current U.S liquidity crisis is a major reason why the market is being held back.

Market Selloff Isn’t Over

Market expert Benjamin Cowen again indicated that the crypto market selloff isn’t over despite Bitcoin’s recent rebound above $70,000. He noted that BTC usually finds strength shortly after 50% drawdowns.

However, he stated that this strength usually lasts anywhere from a few days to a few weeks. “Historically, many countertrend rallies by BTC during midterm years have topped during early March,” Cowen added.

Bitcoin and the broader crypto market could at least see more relief in the short-term, according to expert Michaël van de Poppe. He opined that BTC is likely to find a higher low and continue to move from here despite its drop below $70,000 today.

Michaël van de Poppe expects today to be a correction day, while the leading crypto moves back up towards the CME gap tomorrow and continues its recovery to $75,000 next week. Altcoins could also see a further recovery as Bitcoin bounces to these levels.