Political gridlock and tight liquidity continue to put pressure on the crypto market
Today’s market sentiment leaned towards risk aversion and uncertainty, mainly influenced by escalating political tensions in the United States. With the government shutdown reaching a record high, investor confidence was put to the test.
US Government Shutdown: Data Vacuum and Policy Uncertainty
- Equaling the longest government shutdown in history : The US government shutdown has officially tied the record for the longest shutdown in history, lasting 35 days since October 1, with no signs of a resolution.
- Economic shock : The Congressional Budget Office (CBO) estimates that the shutdown could reduce GDP growth by 2% to 3% in the fourth quarter .
- Data vacuum : The suspension of major official data releases, including non-farm payrolls (NFP) and GDP, has forced markets to rely more heavily on private sector indicators, making Federal Reserve (Fed) decision-making more complex.
“Hawkish rate cuts” and liquidity tightening
greater-than-expected tightening of global liquidity .
- The dollar strengthened as cautious comments from Powell dampened expectations of another rate cut in December. This “hawkish rate cut” pushed the dollar index (DXY) higher, maintaining the dollar’s strength and advantage over major currencies.
- Risk pressures : As the pace of easing slows, global liquidity tightens, suppressing risk assets, including equities, emerging market currencies, and crypto assets.
Cryptocurrency Market Outlook: Facing Pressure and Turning Point Signals
Against the backdrop of “hawkish interest rate cuts” and a continued strong dollar, the crypto market as a whole is under pressure.
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Bitcoin (BTC) : It has fallen back below $110,000 and continues to consolidate within the $ 110,000–$105,000 range. A decisive break below $ 105,000 could trigger a medium-term bearish reversal.
BTCUSD, Daily Chart | Source: Ultima Markets MT5 -
Ethereum (ETH) : Falls below $3,900 , continuing its decline towards the $3,600 area. The price structure has formed a descending triangle pattern ; a sustained break below $3,600 would constitute a typical bearish signal.
ETHUSD, Daily Chart | Source: Ultima Markets MT5
Risk Warning : Trading leveraged derivatives involves high risk and may result in capital loss.
Author：Joshen Stephen｜Senior Market Analyst at Ultima Markets
Disclaimer : The comments, news, research, analysis, prices and other information contained in this article are for informational purposes only and are intended to help readers understand market conditions. They do not constitute investment advice.