The cryptocurrency market is showing signs of recovery as the United States government shutdown approaches a resolution. With the Senate reaching a bipartisan deal, traders are optimistic about a significant uptick in the coming quarter.
Last weekend marked a notable turnaround for both short-term and long-term investors who shifted their focus back to riskier assets after a prolonged period of decline. Bitcoin experienced a 4.4% increase on Sunday, rising to trade at $95,541, rebounding from earlier losses that saw it dip below the $100,000 threshold for the first time in months. This downturn had sparked a wave of outflows and a drop in the total market cap below $3.5 trillion.
Investor sentiment was impacted heavily by institutional outflows, which resulted in a significant withdrawal of nearly $1 billion from Bitcoin funds last week. This trend led some investors to reposition their assets into altcoins as a strategy to mitigate losses. The previous week saw substantial inflows into centralized exchanges, further contributing to Bitcoin”s price fluctuations.
Meanwhile, Ethereum also regained its momentum over the weekend, climbing nearly 8% within 24 hours. Ether has now surpassed the $3,500 mark, a critical level that it had recently lost due to increasing liquidations. Similar to Bitcoin, Ethereum”s price movements were influenced by macroeconomic conditions in the U.S., resulting in certain periods of exchange-traded fund (ETF) outflows.
In addition, XRP and BNB saw impressive gains of 8.4% and 5%, respectively. XRP, in particular, has attracted new institutional investments, benefiting from growing interest in its cross-border transaction capabilities. The community remains hopeful for potential spot ETF approvals for both XRP and Solana, which also surged by 7% this weekend, reaching a trading price of $166.
The overall gains across digital assets can largely be attributed to the anticipated end of the longest government shutdown in U.S. history. After a month of political stalemate, the resolution has had a significant impact on financial markets and other sectors, adding to the prevailing uncertainty. The fallout from the shutdown extended beyond cryptocurrencies, affecting industries like aviation, which saw thousands of flight delays and cancellations.
