Bitcoin (BTC), Ethereum (ETH) and altcoins have again been surging due to seemingly renewed optimism and positive investor sentiment in financial markets, supported by an update that the US government shutdown could soon come to an end. Bitcoin, the flagship cryptocurrency, has surged around 5% in the last 24 hours to trade at just over $106,000 at the time of writing. And Ethereum price increased around 8% to over $3,600. Other major crypto-assets such as XRP, BNB, and Solana have also recorded substantial gains.
The Bitcoin and crypto market price recovery comes following a wider rebound in market sentiment after media reports that US senators appear to have finalized a bipartisan funding deal. Should this be confirmed, then it would mark a step towards finally ending the government shutdown.
On November 9, the Senate had voted 60-40 on the legislation, which now has to pass the House. At that point, it would be sent to President Donald Trump for his approval and official signature.
The 40-day government shutdown appears to have exhausted liquidity in the overnight funding market, leading to growing market uncertainty in the past 40 days.
Now, the potential end of this period could result in risk assets to begin to factor in a better macro environment. This could include more flexible monetary policy, the end of lingering trade disputes, as well as general optimism before the upcoming mid-term election.
Market analysts are indicating that easing macro uncertainty and fresh optimism as it relates to progressive policies could have helped lead the current price surge.
However, nobody can accurately predict the future course of events. And both the crypto and stock market remain susceptive to extreme price fluctuations. Crypto, in particular, reacts very strongly (in most cases an overreaction) and over-leveraged longs or shorts get liquidated rather quickly. These frequent liquidations have resulted in traders and investors losing large amounts in short time-spans. Because of excessively high leverage, Bitcoin and crypto markets remain quite risky for less experienced investors in particular.