Bitcoin Gains Slight Momentum Amid U.S. Government Shutdown Concerns and Market Volatility

Bitcoin Recovers Slightly on Global and Domestic Exchanges

Bitcoin (BTC) has experienced a modest recovery, breaching the 160 million KRW mark, as uncertainty surrounding a U.S. government shutdown weighs on global financial markets. The legislative deadlock between Republicans and Democrats over a short-term spending bill is creating further instability across global economic sectors.

As of 8:30 a.m. KST on September 29, Bitcoin traded at 160.47 million KRW on South Korea’s Upbit, a 1.63% rise from the previous day. On Binance, a global cryptocurrency exchange, BTC gained 2.34% to trade at $11,2107. Other major cryptocurrencies followed suit, showing positive movement. The CoinDesk 20 Index, which tracks the top 20 altcoins by market cap, rose by 1.81%. Ethereum (ETH) increased by 2.76%, reaching $4,132, while XRP climbed 1.94% to $2.86.

Bitcoin Short Positions Face Heavy Liquidation

New data reveals a notable spike in Bitcoin short liquidations, with bearish investors taking a significant hit. According to Coinglass, the past 24 hours saw approximately $44.43 million (KRW 62.6 billion) in Bitcoin short positions liquidated, accounting for 96% of all leveraged positions closed. Across the broader cryptocurrency market, total liquidations reached an astounding $1.15 billion (KRW 1.62 trillion), reflecting heightened market turbulence.

U.S. Government Shutdown Threat Looms Over Financial Markets

The possibility of a U.S. federal government shutdown is creating ripple effects across financial markets. Should Congress fail to pass a temporary budget resolution, the federal government could cease operations starting October 1. Efforts are underway to navigate the bipartisan deadlock, with former President Donald Trump engaging congressional leaders in search of a compromise.

A shutdown could lead to wide-reaching economic repercussions, including postponing the release of the September jobs report, a critical Federal Reserve tool for assessing interest rate policies. Chris Weston, head of research at Pepperstone Group, expressed concern, stating, “A delayed jobs report could shift market sentiment, forcing investors to recalibrate risk assessments and adjust their strategies.”

Corporate Bitcoin Acquisitions Slow Amid Global Uncertainty

Corporate interest in Bitcoin and other digital assets has seen a significant decline in recent months amidst mounting economic concerns. A drop in institutional demand may exacerbate price volatility and contribute to prolonged weakness in the cryptocurrency market.

Data from blockchain analytics leader CryptoQuant highlights a sharp deceleration in corporate Bitcoin acquisitions since July. While July marked a robust purchasing period, subsequent months revealed a downturn, with August recording 12,600 BTC acquisitions and September’s figure at 15,500 BTC—less than half of July's volume. Analysts cite macroeconomic uncertainties, including inflation and geopolitical risks, as contributing factors to this slowdown.

Michael McCluskey, CEO of Sologenic, commented, “Summer's corporate buying spree has given way to cautious behavior as prices decline across digital assets. The absence of sustained institutional demand is leaving the market vulnerable to short-term volatility.” Joe DiPasquale, CEO of BitBull Capital, added, “As corporate buying diminishes, Bitcoin’s treasury narrative is losing credibility. Combined with forced liquidations and increasing risk aversion, we may see prolonged price corrections across the market.”

Heightened Regulatory Scrutiny Shapes Corporate Adoption

Increasingly stringent regulatory oversight is casting a shadow over corporate digital asset strategies. Major authorities, including those cited by The Wall Street Journal, are investigating unusual trading patterns and abrupt shifts in stock prices tied to cryptocurrency-related firms. Such scrutiny could deter corporations from engaging heavily in the digital asset sector, potentially stalling broader adoption.

Long-Term Outlook for Bitcoin Remains Positive

Despite short-term challenges, optimism for Bitcoin’s long-term trajectory persists among analysts. Gary Oshaw, head of global market insights at Hashdex, maintains a bullish outlook, predicting that Bitcoin could exceed $140,000 by year’s end. Oshaw stated, “While corporate strategies face headwinds and market volatility heightens, the fundamental demand for Bitcoin as a treasury and investment vehicle remains intact. This could propel Bitcoin to new record highs once these short-term disruptions clear.”

Fear & Greed Index Reflects Cautious Sentiment

Investor sentiment remains cautious but is showing mild improvement. The Alternative.me Fear & Greed Index, a popular gauge of market sentiment, climbed slightly to 37 (Fear) from 33 the previous day. The index ranges from zero to 100, with lower figures indicating strong selling pressure and higher values signaling rising buying appetite.

Market Outlook: Volatility Ahead

The digital asset market remains at a crossroads, heavily influenced by regulatory crackdowns, economic uncertainty, and shifting corporate participation. These factors are likely to fuel heightened volatility in the weeks ahead. Investors are watching closely as Bitcoin attempts to build on its modest recovery, while broader market momentum remains uncertain.

As a pivotal transition period unfolds, the next few months could shape Bitcoin’s future trajectory amidst unprecedented market challenges and opportunities. Will the cryptocurrency sustain its recovery and push toward new highs, or will further headwinds amplify the pressure? Market participants brace for what’s to come.