Positive developments regarding the budget package passed by the US Senate have sparked a notable rally in cryptocurrency markets. The uncertainty that had increased in the markets following the 40-day federal government shutdown has eased somewhat as the package progresses toward approval.
First and foremost is data. Bitcoin rose approximately 2% in 24 hours, trading near $106,000. Ethereum rose approximately 7.8% to $3,632. XRP gained 8.4%, Binance Coin 3.7%, and Solana 7.8%.
The Senate made progress on the disagreements that led to the government shutdown
The primary reason behind this rise is that the budget package, which passed the Senate with a 60-40 vote, is perceived by markets as a signal that the threat is disappearing. If enacted, it will allow for the reopening of closed institutions, the payment of government salaries, and the economy to operate at full capacity again. It's not surprising that the markets reacted in this direction. Some prominent comments in market analyses include: Peter Chung, research director at Presto Research, stated, “The prolonged lockdown has drained liquidity from overnight loans and increased anxiety in the markets. Once this burden is lifted, risk assets can be directed.” Similarly, Vincent Liu, chief investment officer at Kronos Research, said, “The decline in macro uncertainty and policy optimism have increased buying appetite in the crypto market.”
Furthermore, the government reopening not only boosts market morale for the day but also normalizes economic data flow, supporting the policy decision-making process of institutions like the Federal Reserve. For example, BTSE COO Jeff Mei summarized this situation by saying, “Economic indicators will return to normal, and stimulus measures may become more visible from now on.” Furthermore, Nick Ruck, director of LVRG Research, emphasized that risk assets, including crypto, have gained momentum as the dollar index's momentum stalled and liquidity increased. Considering the crypto market movement in a broader context: As Asian markets opened, US stock futures rose, and the previous pressure on the dollar/currency front partially eased. Under these circumstances, Bitcoin and other leading digital assets re-confirmed their position in the "risky asset" category. A technically upward trend has formed in the market in the short term.
However, an important side note: The Senate decision is not yet final. After receiving approval from the House of Representatives, the bill will be sent to the President for consideration for signature. Any disruption could resurface uncertainty, potentially exacerbating market turmoil. In this context, indicators investors should closely monitor include fund flows (especially ETFs focused on crypto), Bitcoin's dominance rates, and whether altcoins will join this rally.
