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Bitcoin News Update: U.S. Government Shutdown Wipes Out $700 Billion from Markets, Forcing Bitcoin Under $100K Amid Tightening Liquidity

Bitcoin News Update: U.S. Government Shutdown Wipes Out $700 Billion from Markets, Forcing Bitcoin Under $100K Amid Tightening Liquidity

Bitget-RWA2025/11/05 09:30
By: Bitget-RWA
- U.S. government shutdown drains $700B from markets via TGA, pushing Bitcoin below $100K amid liquidity contraction. - Corporate reports show mixed liquidity strains: 3D Systems reports $75.8M cash decline, Chord Energy spends $336M on Q3 capex. - Analysts cite "perfect storm" of macroeconomic crisis and exhausted crypto bull cycle, with 1M+ Bitcoin sold by long-term holders since June. - Markets face fragile balance: oversold conditions and seasonal Bitcoin strength contrast with political gridlock and m

Liquidity is tightening in both conventional and digital asset markets, with experts cautioning that a meaningful rebound will likely require a consolidation phase as economic and political challenges persist. BitMEX analysts report that the ongoing U.S. government shutdown, now lasting 36 days, has intensified the liquidity shortage by removing $700 billion from the financial system via the Treasury General Account (TGA). As a result, the TGA has surged to an unprecedented $1 trillion, depriving risk assets—including cryptocurrencies—of capital and sending

below $100,000 for the first time since June, according to a .

Recent corporate earnings further highlight the liquidity squeeze. 3D Systems (NYSE: 3DS) saw its cash and cash equivalents drop by $75.8 million in Q3 2025, mainly due to operational and financing cash outflows, as detailed in its

. Jackson Financial Inc. (JXN) reported $216 million in free cash flow at the holding company level, but indicated that liquidity reserves remain above their target in . Chord Energy (CHRD) reported $336.3 million in capital expenditures for the third quarter, with liquidity standing at $2.1 billion as of September 30, according to the . These varied results point to industry-specific pressures but are consistent with overall market vulnerability.

Bitcoin News Update: U.S. Government Shutdown Wipes Out $700 Billion from Markets, Forcing Bitcoin Under $100K Amid Tightening Liquidity image 0

BitMEX attributes Bitcoin's 19% slide from its October high to a combination of its four-year bull run losing momentum and the broader liquidity crisis. The extended government shutdown has halted Treasury outflows, postponing the cash infusions that typically bolster risk assets at year-end. Historically, after reaching a record high following ETF approval in 2024, Bitcoin has tended to fall 70-80% in the subsequent year, as noted in a

.

The Federal Reserve’s reluctance to cut rates, coupled with eight straight months of manufacturing decline, has added to investor unease. Ed Engel of Compass Point observed that since June, long-term holders have sold over 1 million Bitcoin, while retail demand remains weaker than in previous cycles. “We see support above $95k but don’t expect immediate catalysts,” he commented in a

.

Still, some analysts are cautiously hopeful. Axel from BlockBeats pointed out that markets appear oversold and could recover as short positions are covered, though a period of stabilization is likely before any sustained uptrend, according to a

. BitMEX anticipates a sharp rebound in liquidity once the shutdown concludes, with large sums expected to flow back into markets and potentially coincide with Bitcoin’s seasonal rally.

At present, investors must navigate a precarious environment. While company cash flows and crypto fundamentals show some strength, the combination of political stalemates, economic softness, and institutional selling continues to expose markets to heightened volatility.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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