The federal shutdown is almost over, but is Bitcoin heading toward its toughest liquidity test yet as funding pressures build across markets?
- The U.S. federal shutdown nears resolution as markets rally, with investors expecting a return of key data and renewed economic clarity.
- Bitcoin and Ethereum rose with equities, though ETF outflows showed the rebound stemmed from direct spot buying and derivatives repositioning.
- The return of CPI and Treasury data will test inflation, yields, and liquidity expectations that shape risk appetite across global markets.
- Liquidity pressures persist as the Treasury General Account swells above $900 billion, leaving Bitcoin vulnerable to volatility despite short-term optimism.
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Federal shutdown relief sparks risk-on rally
The U.S. may finally be approaching the end of its record federal shutdown. On Nov. 10, the Senate approved a bipartisan funding bill with a 60–40 vote to reopen the government through late January, sending the proposal to the House for final consideration.
Lawmakers were called back to Washington to secure the deal, signaling a possible breakthrough after weeks of fiscal gridlock.
Financial markets responded positively, led by technology stocks. The Nasdaq climbed about 2.3%, the S&P 500 gained nearly 1.5%, and the Dow added around 0.8%.
Treasury yields inched up to the 4.11–4.13% range as bond prices slipped, consistent with a “risk-on” environment in which capital moves toward equities and higher-yield assets.
On Nov. 11, global equity markets stayed firm, though U.S. futures eased slightly as traders reassessed the previous day’s rally.
The prolonged shutdown froze the release of key government data, including reports from the Labor Department, the Census Bureau, and the Bureau of Economic Analysis.
The monthly employment report was canceled for a second consecutive month, and officials warned that the Consumer Price Index might face similar delays. Even contingency plans from major agencies confirmed widespread interruptions in data collection, aside from a few limited CPI updates.
Once the government reopens, investors will regain access to the economic indicators that guide expectations for growth, inflation, and monetary policy.
These indicators directly influence global risk appetite and often drive flows into alternative assets such as Bitcoin (BTC), where sentiment tends to follow changes in macro liquidity.
Crypto joins broader market rebound
Crypto markets moved in step with equities. Bitcoin climbed to a seven-day high of about $106,500 on Nov. 10 after dipping near $99,000 over the weekend. As of Nov. 11, it trades around $103,500, a modest pullback after a strong rebound.
Ethereum (ETH) followed the same risk-on tone, rising to $3,650 from weekend lows near $3,100 before stabilizing around $3,460.
Expectations of a government reopening, combined with hopes of short-term liquidity support, lifted sentiment across digital assets. Fresh corporate accumulation led by Strategy, one of Bitcoin’s largest institutional holders, added further strength.
However, U.S. spot Bitcoin ETFs were not behind the rally. Data from CoinShares reported a second consecutive week of outflows totaling about $1.17 billion.
The gap between ETF redemptions and rising prices indicates that the rebound likely came from direct spot buying and derivatives repositioning rather than fund inflows.
In earlier political standoffs, traders typically moved into cash or U.S. Treasuries, leaving crypto sidelined. This time, signs of reopening reduced headline risks, giving investors the confidence to rebuild growth exposures across technology and digital assets.
Gold advanced toward $4,100 per ounce alongside Bitcoin, pointing to investors’ comfort with holding both hedge assets and liquidity-sensitive instruments.
For now, Bitcoin’s rebound marks that investors are stepping out of defensive mode and returning to assets that benefit from growth and liquidity.
Reopening restores macro drivers for crypto
The next few days will bring the return of U.S. economic data that has been missing for weeks. The Consumer Price Index for October will be the first major test of how inflation is behaving after the shutdown blackout.
A stronger print or sticky services inflation could quickly push bond yields higher and temper the market’s appetite for risk. The 10-year Treasury yield already sits near 4.12% after the Nov. 10 equity rally.
Higher yields can make borrowing more expensive and compress valuations across growth assets if the climb continues.
Government borrowing plans form the second pressure point. Early November Treasury reports detailed the next quarter’s coupon and buyback plans, providing the first look at how debt supply will evolve once auctions resume.
Even subtle changes in how the Treasury finances its obligations, whether leaning on short-term bills or adjusting long-term issuance, can alter the yield curve, influencing the cost of leverage across markets, including crypto, where funding rates often track global liquidity and dollar strength.
Monetary policy expectations add another moving part. As of Nov. 11, CME’s FedWatch tool showed markets still expecting rate cuts toward the end of 2025, though confidence in that path remains subdued.
A hot CPI or resilient labor data could delay those expectations and keep real yields firm. Higher real yields make holding cash and Treasuries more appealing relative to volatile assets.
Each of these levers will reset as Washington returns to normal operations. If inflation cools and debt supply is absorbed smoothly, markets may continue to breathe easier, supporting both equities and crypto. If inflation proves sticky or auction demand weakens, yields could rise again, drawing liquidity away from risk assets.
Bitcoin waits for break above $110,000
A growing concern in the market is the rise in the U.S. Treasury General Account, now above $900 billion for the first time since 2021, according to The Kobeissi Letter.
The account, which acts as the government’s main cash reserve at the Federal Reserve, has expanded by about $666 billion since June. As this balance increases, it drains liquidity from the banking system and makes short-term borrowing in the repo market more costly.
Daily repo transactions now reach roughly $3 trillion, about three times the level from three years ago. If these pressures persist, the Fed may need to intervene and expand its balance sheet again to keep funding stable.
If current trends persist, liquidity could tighten further, bringing more volatility to rate-sensitive assets, including Bitcoin.
At the same time, derivatives markets have not displayed any real return of speculative activity. Data from Glassnode released today show that Bitcoin futures open interest remains muted after October’s leverage reset, with minimal new activity across major exchanges.
The slowdown points to a wider cooling in sentiment, as traders appear reluctant to rebuild exposure until there is more clarity on policy direction and liquidity support.
Historically, periods of low open interest during macro uncertainty often precede healthier market recoveries, as excess leverage clears out of the system.
Meanwhile, analysts tracking Bitcoin’s price view $110,000 as the next major test. Charts shared by trading desks place BTC below its 200-day moving average and near long-term resistance levels that previously acted as support.
A clear breakout above that range could confirm renewed momentum, while repeated failures there may result in another retreat.
For now, confidence is returning gradually, but conviction is still fragile. Until liquidity expands or real demand strengthens, Bitcoin’s stability will depend more on consistent funding conditions than on sentiment alone. Trade wisely and never invest more than you can afford to lose.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
