Bitcoin (BTC) has resumed its downward trend, trading at approximately $65,645 after failing once again to breach the crucial $70,000 resistance level. This decline has not occurred in isolation, as it has impacted the broader digital asset market, with major cryptocurrencies such as Ethereum (ETH), XRP, and Solana (SOL) experiencing similar downturns.
Market expert Ash Crypto has linked this latest selloff to two significant factors: the deterioration of US economic indicators and the looming possibility of a federal government shutdown. In a recent post on X, he highlighted a series of disheartening macroeconomic reports that have intensified concerns regarding the resilience of the American economy. Notably, US home sales fell by 8.4% in the previous month, marking the steepest decline seen in nearly four years. Concurrently, initial jobless claims exceeded expectations, indicating potential vulnerabilities in the labor market. Collectively, these indicators suggest a loss of economic momentum, elevating the risks of a recession.
Compounding these worries, there is an increasing probability of a government shutdown, with estimates suggesting a 96% chance that it could happen this week. According to Ash, such a shutdown would likely put additional pressure on both traditional financial markets and cryptocurrencies by constraining liquidity. He believes that the US economy is entering a tumultuous phase that is already affecting equities, Bitcoin, and the wider digital asset market, with prospect for further weakening until a positive market catalyst appears—potentially a new trade agreement from President Donald Trump or a significant liquidity injection.
Technical analyst Crypto Rover has shared similar sentiments, cautioning that the resurgence of the government shutdown poses a serious liquidity risk to financial markets. Adding complexity to the situation, the recent increase in the US debt ceiling to $41.1 trillion prevents an immediate default but provides lawmakers with more leeway in negotiations, which could ironically lead to a prolonged standoff. Without immediate financial pressure, both parties may hesitate to make concessions, raising the likelihood of an extended shutdown.
Rover has pointed out additional indicators of economic decline, including weakening labor conditions, declining retail expenditure, and an uptick in corporate bankruptcies. He warns that if a government shutdown occurs—and persists—the potential liquidity drain could be severe, placing additional strain on both equities and cryptocurrencies like Bitcoin. As these economic challenges unfold, market observers remain cautious and watchful for developments that could signal a shift in the prevailing trends.
