Bitcoin price hits $118K amid U.S. government shutdown

Bitcoin price has registered a strong recovery as trading activity surged and investors turned to digital assets during the U.S. government shutdown.

Bitcoin climbed back to $118,473 on Oct. 2, up 3.4% in the past 24 hours, as investors turned to crypto and gold during the first U.S. government shutdown since 2018. The move lifted BTC’s weekly gain to 6% and its 30-day rise to 7.4%, leaving it just 4.5% below the all-time high of $124,128 set on August 14.

Coinglass data shows derivatives volume climbing 50.6% to $122.8 billion, while open interest rose 6% to $86.6 billion. Rising open interest alongside higher volume indicates renewed positioning from traders rather than short-term speculation.

The strong move has also pulled total crypto market capitalization up 3.5% to $4.16 trillion, adding weight to the seasonal optimism traders describe as “Uptober.” 

Government shutdown drives flow into BTC

The timing of the rally coincided with the first U.S. government shutdown since 2018, which began on Oct. 1 after Congress failed to approve a budget. The standoff, tied to spending cuts and healthcare subsidies, unsettled traditional markets. S&P 500 futures dipped 0.6%, the U.S. dollar weakened, and foreign stocks saw outflows.

On the other hand, Bitcoin (BTC) took the opposite course. Gold reached a record $3,850 per ounce as investors moved into safe havens, and Bitcoin jumped above $119,000 for the first time in two months. The appeal of Bitcoin as an asset with a fixed 21 million supply is highlighted by shutdowns, which often raise questions about government debt and fiscal credibility.

Regulatory and policy developments also provided a tailwind. Spot Bitcoin exchange-traded funds in the U.S. attracted nearly $1 billion of inflows in late September, while BlackRock’s fund surpassed $80 billion in assets.

In a historic move that is expected to encourage more businesses to hold Bitcoin over the long run, the Treasury clarified that unrealized gains on corporate balance sheets would not be subject to taxes.

Bitcoin price technical analysis

Bitcoin’s rise to $118,473 has put it above a number of significant technical levels. With the relative strength index at 63, the market is moving in a neutral to bullish direction without yet reaching overbought territory. The Awesome Oscillator and MACD levels both flash buy signals, indicating growing trend momentum.

Bitcoin is currently trading well above its short- and mid-term moving averages. The 10-day and 20-day EMA and SMA, all sit below the current price, reinforcing the breakout. Longer-term indicators confirm the trend, all pointing to a sustained bullish structure. 

Bollinger Bands also show increasing volatility, as the price is getting closer to the upper band around $119,878.

If ETF inflows continue and macro risk fuels additional demand for safe-haven assets, a breakout above $119,900 could pave the way for new highs this month. On the other hand, failure to close above resistance may see BTC consolidate around $114,000, with deeper support at $108,900 if selling pressure returns.