Crypto Markets Rebound as U.S. Shutdown Deal Nears and Fed Rate Cut Hopes Rise

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The crypto market surged over the weekend as optimism grew that the United States government shutdown, now in its 40th day, may finally be coming to an end.

Related Reading: US Gov’t Shutdown Deal Sparks Hope For Crypto Market Relief

Reports of a bipartisan Senate deal lifted global investor sentiment, sending Bitcoin above $106,000 and Ethereum past $3,600 for the first time in nearly two weeks. The overall crypto market capitalization jumped 4.4% to $3.6 trillion, according to CoinGecko data.

BTC's price records small gains on the daily chart. Source: BTCUSD chart from Tradingview

Shutdown Relief Sparks Market Optimism

The Senate voted 60–40 to advance a funding bill, which is expected to restore federal operations by midweek.

President Donald Trump is set to sign the legislation once it passes the House. Analysts say the reopening could revive economic data flows and provide the Federal Reserve with the clarity needed to resume rate cuts as early as December.

Jeff May, COO at BTSE, noted that “without key data during the shutdown, the Fed had to wait. Once operations resume, policymakers will have the confidence to adjust rates more actively, potentially easing liquidity pressures across markets.”

Bitcoin Leads the Rebound as Liquidity Returns

Bitcoin rallied more than 4% in 24 hours, reclaiming the $105,000–$106,000 range, while Ethereum gained over 5%.

Other major cryptos, including XRP and BNB, also advanced, reflecting renewed risk appetite. Analysts attribute the rebound to an anticipated recovery in liquidity as government functions and Treasury flows normalize.

Peter Chan of Presto Research said, “Removing the shutdown factor opens the door to a repricing of risk assets in a favorable macro setting, looser monetary policy, fiscal incentives, and reduced uncertainty.”

Despite the bullish tone, whale movements remain in focus. On-chain data from Lookonchain revealed that early investor Owen Gunden transferred 3,549 BTC ($361 million) to Kraken, sparking speculation of continued profit-taking.

Yet analysts like “Darkfost” believe these sales represent “a healthy rotation of long-term holders,” noting that institutional demand and ETF inflows have provided sufficient liquidity to absorb large sell orders.

Fed Policy, Inflation, and Crypto’s Path Forward

The prospect of a reopened government has also fueled bets on another Federal Reserve rate cut in December, with CME data showing a 63% probability. Lower borrowing costs would likely benefit both equities and digital assets.

Related Reading: Why Are Bitcoin OGs Dumping Billions Of Dollars In BTC?

While macro optimism drives short-term gains, experts warn that lasting recovery depends on consistent liquidity and policy stability. Still, with Bitcoin’s volatility decreasing and Ethereum’s ecosystem attracting institutional deployments, analysts see the foundations for a renewed crypto bull phase heading into 2026.

Cover image from ChatGPT, BTCUSD chart from Tradingview

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