US stock markets soared on Wednesday as investors anticipated the upcoming US House vote on a bill to end the government shutdown. Bitcoin (BTC), on the other hand, fell from an intra-day high of $105,300 to a weekly low near $101,200, marking a 3.4% decline.
Key Takeaways:
Bitcoin dropped 3.4% amid renewed flows into equities and precious metals.
The DOW gained 423 points, hitting a fresh intraday high ahead of the US shutdown vote in the US House of Representatives.
Market dynamics between Bitcoin and the US Indexes
The Dow Jones Industrial Average rose 0.9%, supported by strong performances from Goldman Sachs, JPMorgan Chase, and American Express. The S&P 500 edged up 0.1%, while the Nasdaq Composite slipped 0.3%, reflecting modest weakness.
Meanwhile, gold climbed to around $4,180 and silver rose above $53, boosted by safe-haven demand and anticipation of resumed government data releases once the shutdown ends.
The sharp decline in Bitcoin is accompanied by a broader shift in risk assets. As the shutdown bill vote approaches, investors may be favoring assets with clearer exposure to economic policies and credit flows. The rally in precious metals reflected both safe-haven demand and expectations of a potential policy pivot by the Federal Reserve amid less-disrupted economic data flows.
Meanwhile, Bitcoin’s decline may reflect continued profit-taking following a minor rally on Wednesday, and potentially lower institutional flows into cryptocurrencies compared to more traditional vehicles.
The market appears to be tilting toward the conventional end of the risk spectrum as the shutdown risk recedes, leaving Bitcoin standing aside the primary rotation in governance- and policy-sensitive assets.
Related: Bitcoin price boom isn’t guaranteed after US shutdown: Here’s why
Volatility could shift in favor of Bitcoin
Despite the current price woes, volatility may soon swing in favor of BTC, with spot Bitcoin exchange-traded funds (ETFs) showing signs of recovery, signaling a gradual return of risk appetite following the record crypto market crash in early October. The spot Bitcoin ETFs recorded $524 million in cumulative net inflows on Tuesday, the largest single-day total since Oct. 7.
Additionally, with the Federal Reserve’s next policy guidance expected later this month, any dovish signals could boost risk appetite across crypto markets. If volatility in equities stabilizes after the end of the shutdown, Bitcoin could regain momentum as institutions return to seek diversification away from traditional markets.
Related: Morgan Stanley says it’s harvest time as Bitcoin enters ‘fall’ season
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
・“We could see a relief bounce when the government shutdown ends today. But in my opinion, the downtrend is in.” — Ted Pillows, crypto investor.
・Equities advanced once more as the U.S. shutdown neared an end.
・Morgan Stanley urges investors to take the profit ahead of crypto winter.
Bitcoin and major cryptocurrencies bled again as investors shied away from digital assets despite the likely end of the government shutdown in the U.S.
The apex cryptocurrency declined nearly 1.6% to $103,559.17 at the time of writing, according to CoinMarketCap data, while Ethereum fell 3.1% to $3,448.26 and XRP fell 2.4% to $2.39. Among other tokens, BNB was down 1.9%, Solana fell over 5%, and Dogecoin fell 2.6%.
“Bitcoin faces heavy whale selling, $45B offloaded since October. Resistance at US$110,800 is key, while support sits at the 50-week SMA near $103K,” BTC Markets analyst Rachael Lucas said.
