On Wednesday, the price of Bitcoin witnessed a notable decline, dropping 3.6% from an intraday peak of $105,316 to a low of $100,803. This occurred despite an upward trend in U.S. stock markets and gold prices ahead of the House vote regarding the cessation of the government shutdown.

The Dow Jones Industrial Average reported an increase of 423 points, or 0.8%, primarily driven by gains in firms such as Goldman Sachs, JPMorgan Chase, and American Express.

The S&P 500 saw a modest rise of 0.1%, while the Nasdaq experienced a slight decline of 0.3%. Gold prices surged to over $4,200, with silver trading above $53.

At the moment of this writing, the Bitcoin price stands at $101,640, having exceeded $104,500 at 9:30 AM EST on Wednesday.

Dynamics of Bitcoin Price Decline and Government Shutdown

The recent downturn in Bitcoin’s price has been interpreted as a shift by investors toward traditional assets that offer more direct exposure to economic policy dynamics. Analysts have posited that profit-taking and diminished institutional flows may further contribute to this decline.

Notwithstanding the recent drop, some analysts suggest that Bitcoin may be approaching a short-term bottom, as indicated by its Net Unrealized Profit (NUP) ratio, which fell to 0.476. This metric, which measures the proportion of coins held in profit, has historically indicated lower price levels, similar to trends observed in 2024, which preceded rebounds of 15–25% in the ensuing month.

The U.S. House of Representatives is anticipated to vote today on a Senate-supported bill aimed at concluding the current prolonged government shutdown. The White House has signaled that President Trump is prepared to endorse the legislation upon its approval.

House Speaker Mike Johnson faces the significant task of uniting his slim GOP majority but expresses optimism regarding the bill’s passage.

The repercussions of the shutdown are continuing to manifest nationwide, with nearly 900 flights having been canceled today, although reports indicate that staffing issues affecting air traffic control are beginning to resolve.

Millions of Americans are also experiencing disruptions to federal services, with specific groups, such as SNAP recipients, remaining in a state of uncertainty following the Supreme Court’s decision to maintain full benefit payments on hold.

The political climate is increasingly charged, as House Democrats demand accountability. Representative Hakeem Jeffries has criticized Senate Democrats who aligned with Republicans on the funding measure, asserting they will need to justify their actions. Lawmakers are navigating the complex balance between party cohesion and public pressure to reopen the government.

This vote represents a pivotal juncture in a protracted shutdown that has resulted in unpaid federal workers and the postponement of critical services. Congress faces increasing pressure to resolve the impasse and restore normal operations, while the administration prepares for the rapid implementation of the reopening plan once the necessary legislation is passed.

Federal Reserve Divergence and Market Uncertainty

Market participants are also considering the implications of a potential rate cut by the Federal Reserve in December. Traders currently assign a roughly 72% probability to a 25-basis-point reduction, though there remains a divide among officials regarding inflationary pressures and slowing economic growth.

During the most recent meeting, Federal Reserve Chair Jerome Powell indicated that a combination of internal policy disagreements and the lack of federal government data had rendered additional interest rate cuts unlikely for the year.

As widely anticipated, the Fed reduced rates by a quarter percentage point to mitigate potential weakening in the job market. Nevertheless, Powell underscored that ongoing disruptions from the federal government shutdown, which have limited the release of essential employment and inflation data, have created uncertainty for policymakers. These remarks, however, had little positive effect on Bitcoin’s price.

In late October, Bitcoin’s price was approximately $109,000. Since that time, it has continued to decline, temporarily falling below $100,000 on several occasions last week.

In a subsequent press conference following the two-day meeting, Powell noted that the Fed relied on various available data sources, including private surveys, internal research, and informal interviews with business contacts nationwide.

While Powell did not unequivocally dismiss the possibility of a December rate cut, he suggested that the Fed might need to exercise caution, likening decision-making in the current environment to “driving in the fog.”

The ongoing situation illustrates that the government shutdown, now in its second month, has stalled the release of crucial economic indicators necessary for informed monetary policy decisions. This data gap has hindered the Fed’s ability to respond promptly to fluctuations in employment and inflation, even as President Trump has publicly advocated for further rate reductions.

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