US Lawmakers Move to Avert Shutdown as Markets Remain on Edge

US Senate leaders and the White House said they have reached a bipartisan framework aimed at preventing a partial government shutdown, though the deal still needs to pass several key votes in Congress before funding officially expires. With the current stopgap spending bill set to lapse at midnight Eastern Time on Friday, lawmakers are racing to finalize the package amid lingering disagreements over funding for the Department of Homeland Security and immigration enforcement.

President Donald Trump acknowledged the urgency on Thursday evening, warning that the “only thing” capable of slowing the country down would be “another long and damaging Government Shutdown.” He said he was working closely with Congress to secure the necessary funding, signaling confidence that a deal could be completed in time.

The tentative agreement helped ease some immediate market fears after a turbulent week in which Bitcoin slid to a nine-month low near $81,000. During the same period, spot Bitcoin and Ether exchange-traded funds recorded roughly $1 billion in combined outflows, reflecting broader risk aversion across financial markets. Traditional risk assets also reacted to a mix of Federal Reserve signals, shutdown headlines and geopolitical developments, while commodities such as gold, silver and oil experienced sharp swings as investors repositioned.

Liquidity Pressures Weigh on Bitcoin

Market participants say Bitcoin’s recent weakness is more closely tied to tightening liquidity than to a loss of confidence in the asset itself. Nick Heather, head of trading at One.io, said the move into the low-$80,000 range looked like a liquidity-driven adjustment rather than crypto-specific selling. He pointed to broader dollar dynamics, noting that risk assets often feel pressure when US liquidity tightens.

Arthur Hayes, co-founder of BitMEX, echoed this view, highlighting a roughly $300 billion decline in US dollar liquidity in recent weeks. He attributed much of the move to a rise in the Treasury General Account, suggesting the government may be building cash reserves ahead of potential spending disruptions. According to Hayes, Bitcoin’s pullback aligns with historically tighter dollar conditions.

Heather added that onchain data shows whale wallets remain largely inactive, indicating that major holders have not begun accumulating aggressively. This, he said, reinforces the idea that recent price action is being driven by macro liquidity shifts rather than a change in long-term conviction.

Geopolitics and Shutdown Risks Keep Volatility High

Geopolitical tensions have continued to amplify uncertainty. Investor sentiment remained fragile after Trump declared a national emergency over Cuba and reiterated that he was weighing military options against Iran’s nuclear and missile programs. These developments have kept risk premiums elevated across markets.

Precious metals, which surged to record highs earlier in January, also saw sharp reversals. Silver dropped more than 20% from its peak, entering what some analysts describe as bear market territory, while gold briefly slipped below $5,000 per ounce before rebounding toward $5,100. The pullback suggests investors are actively rebalancing amid shifting expectations around growth, policy and global stability.

What Past Shutdowns Mean for Bitcoin

Historically, government shutdowns tend to undermine business and consumer confidence, delay economic data and raise questions about the US fiscal outlook. Rather than creating a clear directional trend, they often lead to heightened volatility across equities, bonds, currencies and digital assets. For Bitcoin, the immediate effect has typically been sharper price swings rather than sustained rallies or sell-offs.

Even if lawmakers succeed in avoiding a shutdown, traders are still contending with tighter financial conditions and elevated geopolitical risks. Until there is clearer visibility on liquidity trends and policy direction, both traditional and crypto markets are likely to remain highly sensitive to headlines and prone to sudden repricing.