Crypto markets reacted positively in the aftermath of the U.S. government shutting down. Although the shutdown did not have an immediate effect on the crypto market, there will be a bottleneck when it comes to the passing of crypto laws and the release of economic data.
Historically, there were many shutdowns, but the ones in 2013 and 2018 had a significant impact on crypto prices. During a 16-day shutdown in 2013, the price of Bitcoin surged by 14% from $132 to $151. Contrary to the 2013 surge, BTC fell 6% from $3,802 to $3,575 when the markets dragged on the shutdown for 35 days.
Julio Moreno, head of research at CryptoQuant, says Bitcoin today resembles 2013 more than 2018: “Bitcoin demand is growing as we enter Q4, which is typically a positive season in terms of price performance.” The crypto market maintains its bullish trend.
The US government shut down yesterday after the Democrats and Republicans did not agree on enhancing Obamacare subsidies. While both parties play the blame game and put the opposition in the spotlight for not co-operating, the crypto market has been going great.
During this forced pull-down, Bitcoin fell from $114.3K to $112.6K taking nearly 8 hours. However, the flagship crypto recovered in half the time and reached $114.5K. During this crash Bitcoin used the 200-day Moving Average to land on. And more importantly, the overall pattern of Bitcoin heading towards the upper trendline of the symmetrical triangle was not disturbed.
Meanwhile, the Altcoin Season Index (ASI) retraced below the 75 altcoin season threshold level. The ASI now reads a value of 67. However, the crypto market was not affected much as the trend of ASI making higher lows was not disorientated.
Bitcoin outperformed the altcoins, as the Bitcoin dominance rose to 58% from 57% yesterday. In addition, the BTC dominance uptrend is still intact, showing that the shutdown had little to no negative impact on Bitcoin.
Although the shutdown does not have a significant impact on crypto, a prolonged shutdown will stall the release of economic data and the passage of bills like the CLARITY Act, etc.
TV personality and author Jim Cramer raising concerns about the impact of the shutdown told CNBC: “I’m not worried about most of this stuff. My biggest fear is that a shutdown will delay important pieces of economic data, making life more difficult for the Federal Reserve and potentially postponing their plans to cut interest rates.”
