US Shutdown Adds to Market Stress
The prolonged shutdown has heightened investor uncertainty, adding pressure to risk assets such as Bitcoin. The US government shutdown entered its 38th day on Saturday, November 8. Notably, BTC climbed to an October 6 record high of $125,761 before briefly sliding to sub-$100,000 levels since the shutdown.
Despite heavy losses, several market strategists, including Tom Lee, remained bullish on BTC’s outlook.
FundStrat Capital Chief Investment Officer Tom Lee spoke to CNBC, stating:
“The October 10 deleverage was the biggest in history, and that means there are still ripple effects being felt even two weeks later. There has been a DeFi protocol streamer that actually reported a pretty sizeable loss and that created further ripple effects, and that’s what happened yesterday, along with this thing called the balancer hack. So, I’d say it’s probably still a couple more weeks.”
Key Week Ahead: Capitol Hill and the Fed in Focus
The week ahead sets the stage for a pivotal week for BTC and the broader crypto market. US economic data could shift sentiment toward the Fed rate path if the US government reopens. A Senate vote on Monday, November 10, could indicate if lawmakers are any closer to passing a stopgap funding bill.
A reopening could trigger a wave of economic data releases, including inflation and labor market figures. Softer inflation and a weaker labor market would likely revive bets on a December Fed rate cut, boosting demand for BTC and BTC-spot ETFs. However, rising consumer prices and weaker jobs data could fuel stagflation jitters, weighing on risk assets.
Fed speakers will also be in focus, with views on the shutdown, inflation, and the labor market likely to influence sentiment.
Bitcoin’s reversal weighed on demand for Ethereum (ETH).
Ethereum ETF Outflows Deepen as ETH Tests Key Levels
ETH-spot ETF issuers registered net outflows of $508.2 million in the reporting week ending November 7. ETH fell to a November 4 low of $3,058 before rebounding above $3,400. Despite the recovery, ETH has fallen 12.99% in the week ending November 9.