Bitcoin rebounded sharply during Monday’s Asian trading session, climbing over 5% to trade above $106,000, as traders grew confident that the US government shutdown would soon be resolved.
The positive sentiment was fueled by reports that the US Senate had reached a bipartisan deal to end the 40-day-long shutdown, which has weighed on risk assets for weeks.
Shutdown resolution boosts sentiment
Odds on prediction markets such as Polymarket and Kalshi surged, with bettors estimating an 85-90% chance that the shutdown would conclude by Friday.
The anticipated reopening is expected to free up billions in Treasury cash, increasing market liquidity and supporting risk assets like bitcoin.
Bitcoin trader Daan Crypto Trades commented:
“This would mean we’d see a boost back in liquidity and also get economic data like CPI and such soon.”
Historical parallels and price action
The last major US government shutdown ended in January 2019, after which bitcoin rallied more than 265% in the following five months.
Analysts and traders now see similar upward potential if government operations resume and liquidity returns to the market.
Recent data indicates a bullish weekly close for bitcoin, strengthening the case for further gains.
Key liquidity levels for bitcoin
Order book analysis by CoinGlass highlights strong liquidity clusters between $111,500 and $115,000, with a notable focus around $112,000.
A breach above $115,000 could trigger a liquidation squeeze, pushing prices toward the next resistance at $117,000.
Analyst AlphaBTC noted that $110,000-$112,000 is the area to watch if bitcoin surpasses $107,000 resistance.
