The likelihood of a government shutdown in the United States has surged to 85%, raising fresh concerns in the cryptocurrency sector. This uptick coincides with a persistent downturn in the market, with Bitcoin trading around $67,000, while the total market capitalization of cryptocurrencies has dipped to $2.3 trillion, reflecting a 1.8% decrease.
The Fear and Greed Index has also dropped to 9, indicating extreme fear among investors. This decline follows Bitcoin”s recent fall below the $70,000 mark, reminiscent of previous partial government shutdowns. Analysts have noted that a combination of heightened financial tensions and the approaching deadline for federal funding has contributed to this uncertain climate.
Recent data from Polymarket, a leading prediction market, revealed that traders are increasingly anticipating an 85% chance of a government shutdown before Saturday. This figure marks a significant rise from a prior estimate of 66%, highlighting the escalating concerns surrounding the U.S. fiscal landscape. Analysts suggest that the possibility of lawmakers failing to reach an agreement on funding is growing, resulting in a pessimistic outlook for any timely resolution.
Investor sentiment has turned bearish, leading to broader market sell-offs. As uncertainty looms, Bitcoin faces significant resistance as investors become more cautious regarding riskier digital assets. Notably, one analyst on the social media platform X, who goes by the name “The Hunter,” cautioned that the current downward trend for Bitcoin could worsen, predicting potential prices near $67,000 for BTC, $1,950 for Ethereum, and $81 for Solana.
Further emphasizing the gravity of the situation, some analysts warned that if selling pressure continues, Bitcoin could plummet to a record low beneath $50,000. However, crypto investor and NFT enthusiast Axel Bitblaze offered a contrasting viewpoint, drawing parallels to 2024 when Bitcoin experienced notable upward momentum after a downturn. He speculated that Bitcoin might stabilize within a range of $60,000 to $80,000, albeit with volatility that could hinder swift recovery.
Despite Bitblaze”s optimistic perspective, he also acknowledged that the potential for Bitcoin to dip below $50,000 remains, suggesting that any decline could be gradual, eroding trader confidence before establishing a stable base. As the prospect of a government shutdown looms larger, analysts have noted the fragile technical structure of Bitcoin, particularly following its inability to breach the $95,000 to $100,000 resistance zone earlier this year. This failure has led to a breakdown below the $85,000 to $90,000 consolidation range, causing a swift decline towards the $60,000 to $70,000 support levels.
