The U.S. House of Representatives successfully passed a $1.2 trillion funding package on Tuesday, concluding a partial government shutdown that had posed risks to federal operations. The bill, which received a narrow approval with a 217-214 vote, secures funding for various government departments through the end of the fiscal year, while additional negotiations regarding funding for the Department of Homeland Security are set to continue in the coming days. This legislative victory is expected to be finalized with President Donald Trump”s signature, officially reopening previously shuttered government agencies.
During the uncertainty surrounding the bill”s passage, Bitcoin experienced a significant drop, reaching a low of $73,000. This decline triggered approximately $30 million in liquidations within decentralized finance (DeFi) protocols as investors reacted to the political stalemate. Notably, large holders of Bitcoin sold off 50,181 BTC over the preceding two weeks, indicating a cautious market sentiment among major stakeholders.
A synchronized decline in various markets unfolded as lawmakers debated the funding legislation. Both Bitcoin and the S&P 500, along with gold, faced downward pressure during this period. Such movements are reflective of a “risk-off” strategy among investors, who tend to pull back from volatile markets in response to potential political and economic upheaval. Interestingly, gold, typically viewed as a safe-haven asset, also saw a decline, as some investors opted to liquidate gold holdings to raise cash or rebalance their portfolios amidst market turbulence.
Following the House”s vote, markets showed signs of relief, which was evident as Bitcoin and the S&P 500 both experienced upward momentum, while gold managed to recover some of its earlier losses. Despite this rebound, analysis reveals a concerning trend in wallet distribution. Data from Santiment indicates that wallets holding between 10 and 10,000 BTC have divested a total of 50,181 coins in a span of two weeks. Conversely, retail investors holding less than 0.01 BTC are rapidly accumulating, suggesting a stark divergence in market sentiment between large holders and smaller retail participants.
This pattern of accumulation among retail investors, coupled with the significant selling from large holders, raises questions about the overall confidence in the market”s near-term trajectory. The contrasting behaviors may indicate that key stakeholders remain skeptical about sustaining price appreciation, despite the conclusion of political uncertainty surrounding the funding bill. The future direction of Bitcoin and the broader cryptocurrency market may hinge on whether this distribution pattern sees a reversal in the wake of recent legislative developments.
