The digital assets market is showing renewed strength amid signs the prolonged U.S. government shutdown may soon end, boosting investor confidence after a volatile week. Bitcoin rebounded sharply in to $106,269, marking a 4.2% gain, while Ethereum outperformed majors with a 5.8% jump to $3,597. This move recoups significant losses as easing macro uncertainty fueled rotation back into high-beta crypto assets.
This positive market reaction follows clear signs of progress in Washington. On Sunday 9th, a new 31-page bill advanced in the Senate with a 60-40 vote, signaling the record-breaking 40-day stoppage could soon end; consequently, S&P 500 rose 0.5%, and gold prices rose above the $4,000 level.
At the same time, the prolonged shutdown has added significant uncertainty, delaying key data releases (incl. CPI, PPI, and the monthly jobs report) and damaging consumer confidence. Notably, the University of Michigan’s consumer sentiment index dropped to its lowest reading in more than three years, hovering just above record lows. While the reopening will release this data, traders are now skeptical the SEC will have time to approve a Cardano ETF before year-end, with market odds dropping from 90% just a month ago to only 38% today, according to CoinDesk.
Bitcoin ($106,111.36) has faced a challenging few weeks, retreating sharply from its record highs as the prolonged U.S. government impasse weighed heavily on the market. The asset tumbled below the pivotal $100,000 level on several occasions for the first time since early August, with BTC remaining more than 15% off its record high.
This macro-driven turbulence has battered related assets and equities. Over the past eight trading days, the 11 spot Bitcoin ETFs have lost more than $2.1 billion in assets, while net outflows for Ethereum funds totaled $579 million. Crypto stocks also took a battering, with exchange giant Coinbase plunging more than 9% last week and Bitcoin treasury Strategy falling over 8%.
However, there's a compelling reason to expect the cryptocurrency to stay above the $100,000 level and rally this week. This optimism is tied directly to the resolution of that political deadlock. As the impasse ends, the primary headwind that suppressed prices is being removed, signaling strong potential for renewed investor risk-taking.
Looking ahead, the market's focus will sharply pivot from political headwinds to economic fundamentals. With the government shutdown ending, the primary catalyst will be the release of backlogged key data, including critical CPI, PPI, and jobs reports. This data dump will provide the first clear, albeit delayed, view of the U.S. economy in over a month and will be crucial in shaping the Federal Reserve's monetary policy outlook. Digital assets, which have traded in high correlation with risk sentiment, will be highly sensitive to these figures, as any deviation from expectations could reset market pricing for future rate cuts.