Crypto markets got hammered Thursday night as the never-ending US government shutdown spooked investors away from anything risky. Bitcoin dropped half a percent to $121,833 after trying to push toward $123,600 and getting rejected hard enough to briefly fall under $120,000.
Ethereum had an even rougher time, tanking nearly 2% to $4,389 after hitting a low of $4,273 during the session. XRP, Solana, and Dogecoin all bled between 1% and 2% as traders bailed on their positions.
The damage was pretty brutal – liquidations topped $670 million in just 24 hours, with over $500 million coming from people betting prices would go up. Bitcoin ETFs hemorrhaged $57 million Thursday, showing that even institutional money is getting cold feet.
We’re now nine days into this government shutdown, with Republicans and Democrats still refusing to talk to each other. Job market data from private sources suggests things are cooling off, though traders are still 94% certain the Fed will cut rates by a quarter point at their next meeting.
CryptoQuant pointed out that Bitcoin really needs to stay above $112,200 soon, or short-term holders might start panic selling. That’s basically where most recent buyers got in, so dropping below it could trigger a nasty cascade of selling.
One crypto analyst thinks Ethereum’s accumulation phase is almost done and predicted it’ll hit $8,000 by year-end if it can close a week above $4,750.
Conclusion
Bitcoin dropped to $121,833 during the government shutdown as $670 million liquidations rattled markets, with analysts watching the crucial $112,200 support level for short-term holder panic.
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