- Bitcoin price falls amid US government shutdown and uncertainty.
- Following the correction in the cryptocurrency market, BTC price remained below $105,000.
- On-chain data Given the bearish momentum, a staggered recovery may be expected.
Bitcoin prices continued to fall below $105,000 on Tuesday, extending the bearish trend that has plagued the market. Bitcoin has fallen 4% in the past 24 hours, bringing the weekly decline to 10%.
Risk-off sentiment in the stock market also contributed to the crypto market crash. This decline comes after a series of liquidations in the crypto market, which also adds to the overall bearish mood.
Bitcoin price struggles after US government intervention Shutdown and liquidity freeze
The current US government shutdown has already entered its second month, and it has had a major impact on financial markets, putting Bitcoin under constant pressure.
The Congressional Budget Office estimates that the government shutdown could slow U.S. GDP growth by up to 2% in the fourth quarter of 2025, costing the economy between $7 billion and $14 billion. It’s not just fiscal uncertainty that markets are suffering from. This is a severe freeze in liquidity, which is reflected in Bitcoin’s on-chain metrics.
Bitcoin exchange reserves increase amid market uncertainty
Bitcoin exchange reserves have increased for the first time in six weeks, according to on-chain data provided by CryptoQuant, indicating that investors are reinvesting their coins on the exchanges. This is a common risk-taking or risk-reducing indicator and allows traders to predict market volatility.
Additionally, mineral reserves are currently at their lowest since mid-2025, meaning miners may be selling Bitcoin to cover operating costs as the shutdown eliminates energy subsidies and tax credits.
The proliferation of stablecoins reflects a shift to safe-haven assets
On top of this, stablecoin exchange withdrawals have soared to record highs as investors scramble to seek the safety of dollar-backed assets. This measure, along with an increase in exchange reserves and a decrease in mine reserves, reflects a more general trend towards de-emphasizing risk assets.
Although there is a possibility of a rebound if the government opens the door, the return of Bitcoin prices is likely to be delayed.
Will BTC price recover to $110,000 soon?
At the time of writing, the price of BTC is $104,20,9, reflecting a slight decline of 4%.
The Relative Strength Index (RSI) is 30, meaning Bitcoin is oversold. This indicates that the price could recover if there is buying momentum.
A rebound from the current support could lead to a rally to the $105,000 level, and if the bullish momentum strengthens, a move to the $110,000 level is possible. The long-term outlook for Bitcoin price looks bullish as current on-chain data points to a recovery.
However, if the market fails to sustain the support at $104,000, we could see a further decline to $100,000.
There is also a bearish trend in the Moving Average Convergence Divergence (MACD) due to the difference between the MACD line and the signal line. This indicates further downward pressure on BTC. There is a red bar in the histogram, suggesting that the market is still dominated by sell conditions.
What is the cause of Bitcoin price decline?
Bitcoin prices are falling due to the continued US government shutdown and widespread risk-off sentiment in the market.
How will the US government shutdown affect Bitcoin?
The government shutdown caused economic uncertainty, frozen liquidity, and reduced investor confidence, impacting Bitcoin’s price.
What does the rise in Bitcoin foreign exchange reserves indicate?
The increase in foreign exchange reserves suggests that investors are moving Bitcoin to exchanges to reduce risk and lock in profits.