Possible Government Shutdown Resolution Ignites Bitcoin Rally Above $106K
Bitcoin surged past $106,000 on Sunday, marking its strongest rebound in nearly a week, as reports emerged that the U.S. Senate had reached a long-awaited agreement to end the 40-day government shutdown—the longest in American history.
According to data provider CoinGecko, the world’s largest cryptocurrency jumped more than 4% in the hours following the news, buoyed by a wave of optimism that the resolution could restore stability to financial markets that have been under pressure for weeks. Since breaking above $106,000, it has retraced to trade slightly below the market.
BTC price (Source: CoinGecko)
The rally was broad across the digital asset sector, with Ethereum climbing more than 7% to trade above $3,600, while XRP and Solana both advanced roughly 6%.
Government Shutdown Pressure Eased as Crypto Market Rebounds
The government shutdown had weighed heavily on investor sentiment throughout October and early November, pushing Bitcoin below the $100,000 mark several times for the first time since early August.
The prolonged impasse between congressional Democrats and Republicans created widespread uncertainty across markets, forcing many investors to de-risk and move into safer assets.
Bitcoin remains about 15% off its all-time high above $126,000, set in early October, while Ethereum has lost even more ground during the same period as traders rotated away from risk-on positions.
The end of the US government shutdown could mark a turning point for digital assets, which tend to react sharply to macroeconomic developments that affect liquidity and confidence.
ETF Outflows and Equity Weakness Reflect Broader Strain
The extended government closure has coincided with a notable downturn in crypto investment products. Over the past eight trading sessions, spot Bitcoin exchange-traded funds (ETFs) recorded net outflows exceeding $2.1 billion, while Ethereum ETFs lost approximately $579 million in the same period.
US BTC ETF flows (Source: Farside Investors)
Analysts have interpreted those outflows as a sign of institutional hesitation amid policy uncertainty and fiscal gridlock.
Crypto-related equities have also been hit hard. Coinbase, the largest publicly traded exchange, fell more than 9% last week, while Bitcoin treasury firm Strategy dropped over 8% as investors weighed the impact of reduced trading activity and shrinking ETF inflows.
However, not all funds have suffered. The Bitwise Solana ETF has seen steady demand despite broader market turbulence, suggesting that some investors continue to diversify exposure toward alternative layer-1 networks even as Bitcoin and Ethereum experience heavier selling pressure.
Senate Deal Sparks Relief Across Financial Markets
As of late Sunday, multiple reports from Politico, The Wall Street Journal, and The New York Times confirmed that Senate Democrats and Republicans had struck a bipartisan deal to reopen the federal government. The agreement followed intense negotiations in recent days, with a bloc of moderate Democrats ultimately agreeing to procedural motions to restore government funding.
Democrats had pushed to extend health insurance subsidies, but sources close to the discussions said the urgency of ending the government shutdown took precedence. The agreement is expected to be formalized in a procedural vote early this week, paving the way for government operations to resume after an unprecedented 40-day halt.
With the government shutdown’s resolution, analysts expect short-term relief rallies across digital assets, though they caution that broader macroeconomic challenges—including inflation concerns and declining liquidity—could limit the upside.
Still, Bitcoin’s swift climb back above $106,000 underscores how tightly the crypto market remains tethered to U.S. political and fiscal developments, even in an increasingly globalized ecosystem.
