The Bitcoin price fell sharply at the beginning of the week. However, with the recovery over the weekend, losses were significantly regained, and the price stabilized at the $106,000 level. The weekly drop, which had approached -10%, finally closed at -4.99%.
The recovery was triggered by news that the US government shutdown would soon end and a post made by President Trump on social media.
‘Big Short’ Claims Triggered the Initial Drop
The initial drop was triggered by worsening investor sentiment in the US stock market. On Tuesday, news spread that the famous bearish investor Michael Burry had opened $1.2 billion in short positions on AI stocks like Nvidia (NVDA) and Palantir (PLTR). This situation pushed skeptical investors to sell and caused a decline in all three major US stock market indices.
Although the main problem was with AI stocks, the cryptocurrency sector experienced a sharper decline: BTC fell about 5% that day, while altcoins recorded higher losses.
On-chain analysts attributed the sharp decline to an exit of institutional investors. Big players had been reducing their crypto positions since the “Black Friday” crash on October 10. Then, the stock market volatility on Tuesday caused the already fragile supply-demand balance to collapse.
The market imbalance deteriorated rapidly, and on Wednesday, Bitcoin fell below the psychological $100,000 support level, dropping to $99,000.
365-Day MA Holds as Critical Support
Analysts watched anxiously, knowing that a further decline would break the 365-day Moving Average (MA) line—this usually signals the start of a bear market. Fortunately, the current drop did not cross this line. Bitcoin found support here and successfully held the 365-day MA, just as it did during the Yen carry trade unwind in August 2024 and the tariff crisis in April 2025.
The second-largest cryptocurrency, Ethereum (ETH), fell to $3,100 on Wednesday. However, it recovered alongside Bitcoin, rising above $3,600 on Sunday, with a weekly loss of -6.55%.
Government Shutdown Resolution: Becoming the Main Catalyst
Throughout the long stagnation, analysts hopefully awaited the end of the US government shutdown. This was because the shutdown was thought to reduce market liquidity and led to a halt in government spending.
Due to the shutdown, approximately 750,000 federal employees were furloughed, and there was a 10% increase in flight delays due to pay cuts for air traffic controllers. Consequently, this situation disrupted important support programs. Raoul Pal, founder of RealVision, argued that the pause in US fiscal policy worsened market liquidity and that the crypto sector was affected by this. He predicted that the resolution of the shutdown would be a potential catalyst for a strong bullish reversal.
This belief was confirmed on Sunday, as Senate Majority Leader John Thune hinted at the possibility of the shutdown ending. The news immediately ignited the Bitcoin rally. Thune’s remarks significantly shifted the betting date on Polymarket; the shutdown end date moved from November 20 to November 11.
Trump’s Dividend Claims Boost Buying Appetite
Simultaneously, a post by President Trump on social media provided another catalyst. Trump wrote, ‘People who are against Tariffs are STUPID!… A dividend of at least $2,000 per person (except for high-income people!)’. The expectation of a direct cash payment to citizens sparked the idea that this money would be channeled into stock market or cryptocurrency investments. This possibility immediately pushed Bitcoin from the $103,000 level to over $105,000.
The Week Ahead: Politics and the Fed
The most critical factor this week is whether the US government shutdown will end quickly. The first procedural vote in Congress is expected on Tuesday. Since the shutdown has paused most US macro data collection for over a month, the impact of this data will be limited for now.
Attention is focused on the possibility of a Fed rate cut at the December FOMC meeting. Several influential Fed officials are scheduled to speak this week, including:
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