US Shutdown Sparks Bitcoin Liquidity Crunch, $100K Entry

Published: 2025-11-06 11:48:45 |

Record 37-day US government shutdown has squeezed market liquidity. The Treasury General Account (TGA) balance surged by about $150 billion, tightening bank reserves and driving high usage of the Federal Reserve’s Reverse Repo Program and Standing Repo Facility. A strong US Dollar Index (DXY) above 100 has further weighed on risk assets, including Bitcoin. Since July, Bitcoin has fallen roughly 5% and dropped to about $104,000—20% below its October peak. Last week saw spot Bitcoin ETFs record net outflows of $1 billion. Historical shutdowns in 2013 and 2018–19 show similar short-lived spikes in risk aversion, with equities and bonds briefly down before rebound. The shutdown’s end should reverse the liquidity squeeze. Treasury outflows will return funds to the market. The Federal Reserve is set to end quantitative tightening on December 1. Both factors could support a Bitcoin rebound. Technical support lies at $101,000–$102,000, with upside targets near $106,500 and $112,000. Traders should brace for volatility driven by liquidity shifts and Fed policy. Late November may offer a buying opportunity ahead of renewed upside in Bitcoin.

Bullish

The prolonged US government shutdown has strained market liquidity, pressuring Bitcoin prices in the short term. A swollen Treasury General Account and tight bank reserves have driven high usage of Fed liquidity facilities. Combined with a strong US dollar, these factors have led to a near-term bearish environment. However, the shutdown’s resolution is expected to release hundreds of billions from TGA balances back into markets, easing the liquidity squeeze. The Fed’s scheduled end to quantitative tightening on December 1 should further support asset prices. Historical shutdowns show quick rebounds in risk assets once the impasse ends. Technical support around $101,000–$102,000 and defined upside targets of $106,500 and $112,000 suggest a bullish medium-term outlook. Traders can use the current dip as a strategic entry point ahead of potential upside momentum.