Bitcoin (BTC) is currently poised to break a six-year streak of September losses, but there is a potential challenge on the horizon due to a modest pullback just before a possible federal government shutdown.
During Friday afternoon, the largest cryptocurrency by market capitalization, Bitcoin, was trading at $26,800, reflecting a 3.2% gain for the month. Nevertheless, it has dipped by 1.6% from its brief peak of $27,400 on Thursday. Should this trend continue into the weekend, it could jeopardize Bitcoin’s positive monthly performance, considering it started September at around $26,000.
Ether (ETH) remained relatively stable around the $1,660 mark, with anticipation building among market participants for the launch of futures-based exchange-traded funds (ETFs) early next week.
Related: SEC Decision Keeps Ethereum Price Stable Above $1,600
Meanwhile, Ripple’s XRP, Solana’s SOL, and TRON’s native token, TRON, have outperformed the broader digital asset market, each posting gains of 3% to 5%. However, the CoinDesk Market Index (CMI) experienced a 0.5% decrease.
The impending government shutdown’s impact on the cryptocurrency market remains uncertain.
Noelle Acheson, a macro analyst and author of the Crypto Is Macro Now newsletter, pointed out that macroeconomic uncertainty is still a significant challenge. Bond markets worldwide are displaying signs of stress, with yields reaching multi-year highs in several major markets like the US, UK, Germany, and Japan. She also noted that the looming US government shutdown adds to this uncertainty, and the revision of US Q2 consumer spending growth downwards suggests potential vulnerability in the face of tightening financial conditions.
Despite the concerns, historical data shows that during the 21 government shutdowns in the past, the S&P 500 rose 55% of the time, generating an average return of 0.3%, as noted by advisory firm Asgard Markets.
The government shutdown could also have implications for crypto regulation. Digital asset investment firm NYDIG believes it might lead to delays in regulatory decisions, as the US Securities and Exchange Commission (SEC) staff will be significantly reduced. This could potentially postpone the approval of a spot Bitcoin ETF until after SEC employees return from a potential furlough, according to Greg Cipolaro, NYDIG’s head of research.
Looking ahead to Bitcoin’s price, there is cautious optimism. Despite the challenging macroeconomic environment, Asgard Markets maintains a constructive outlook for risk assets in Q4. BTC and ETH are attempting to break out of their range established over the past month and a half, with a short-term target between $28,500 and $30,000, as long as BTC remains above $26,000.
Markus Thielen, Matrixport’s Head of Research, pointed out that October has historically been a bullish month for Bitcoin, with the market being up in eight out of the last ten Octobers, averaging a 22% gain. He believes that as interest rates become more dovish, Bitcoin is poised for a significant breakout. Additionally, Bitcoin miners, particularly Marathon Digital, are entering the next quarter with more efficient operations, although the halving remains a topic of concern, with Marathon Digital anticipating increased mining costs from $24,000 to $29,000 per Bitcoin.