Why is crypto market down today? Traders eye Fed as government shutdown drags on
The crypto market is down, and Bitcoin has retreated from all-time highs as macro pressure weighs on investor sentiment.
- The crypto market is down, with Bitcoin retreating from its ATH
- Macro uncertainty amid the government shutdown is causing concern
- Traders are looking at the Fed’s moves as investors lose faith in the dollar
Crypto markets dipped on Wednesday, Oct. 8, as investors grew concerned about mounting macro uncertainty. The protracted government shutdown, mixed signals from the Federal Reserve, and delayed economic data continue to weigh on sentiment.
Bitcoin (BTC) fell from its Oct. 6 all-time high of $126,198.07 and is now trading below $123,000. Pullbacks after big rallies are normal as traders take profits and overleveraged positions are cleared. Still, most major altcoins are seeing even larger losses as macroeconomic uncertainty continues to hurt sentiment.
With the U.S. federal government shutdown entering its second week, releases of key economic figures are on hold. This includes reports on inflation, employment, and consumer sentiment, data that are crucial for gauging the Fed’s rate-cut path and that, in their absence, contribute to broader uncertainty.
Why is the crypto market down today?
Crypto markets are highly sensitive to Fed policy expectations. Without fresh economic data, it is difficult for markets to assess the direction of interest rates and how much liquidity will flow toward Bitcoin and altcoins. Even so, there may be a silver lining.
Gold is performing very well. The precious metal has surged since the shutdown, surpassing $4,000 per ounce. Kevin Rusher, founder of RWA lending firm RAAC, told crypto.news that gold’s rally is a clear sign that investors are losing faith in the dollar. Citadel CEO Ken Griffin has similarly suggested that uncertainty may benefit crypto:
“Gold is at record highs and the appreciation in other dollar substitutes — to use that word loosely — in items like crypto, for example, is unbelievable. So we’re seeing substantial asset inflation away from the dollar,” Ken Griffin, Citadel.
