Key Insights:
- The US shutdown is expected to continue until at least Thanksgiving or December 1. This has added bearish pressure to the crypto market, despite recent ETF approvals.
- Glassnode reported that Bitcoin hasn’t reclaimed the top buyers’ cost basis since July. This raises the chances of a retest near $104,000.
- Crypto experts anticipate a November rally, driven by historical trends, potential Fed rate cuts, and improved macroeconomic conditions.
With the October month ending in negative territory, the crypto market rally for November could also be at risk. This is because the US shutdown is likely to extend up to 61 days, until December 1.
Thus, despite the approval of major crypto ETFs, the overall sentiment remains bearish. This is quite evident from the massive market liquidations experienced over the past week.
US Shutdown Can Risk November Crypto Market Rally
November started on a positive note. However, the crypto market has experienced significant long liquidations over the last 48 hours. Bitcoin’s brief attempt to surge past $110,000 is met with resistance, pushing it back to the $105,500 support level.
The broader cryptocurrency market has seen liquidations soar to over $1 billion in the last 24 hours. Polymarket data shows the US shutdown is expected to continue through Thanksgiving. It may last until December 1.
If confirmed, this would mark a 61-day shutdown, roughly 7.5 times longer than the historical average. In the first 30 days of the shutdown, the U.S. government added $600 billion in new debt.
This represents an average of $19 billion per day, reflecting the continued strain on fiscal operations. The impact has also rippled through the transportation sector.
Since the shutdown began on October 1, more than 3.2 million airline passengers have faced flight cancellations or delays. Analysts warn that if the US shutdown continues through Thanksgiving, that figure could surpass 10 million affected travellers.
Historically, November has been the strongest month for BTC with returns averaging 42.5%. However, the current shutdown and heavy sell-off from Bitcoin OGs could play a spoilsport this time.
Deeper Bitcoin and Crypto Market Correction Likely Ahead
According to Glassnode, Bitcoin has repeatedly failed to reclaim the cost basis of top buyers’ supply since July. This signals growing pressure among recent BTC investors who have invested at higher prices.
The firm noted that this trend increases the chance of a retest of the 0.8-quantile cost basis. In the crypto market, that level is estimated near $104,000. This happens as top buyers begin to capitulate and transfer holdings to stronger hands.
Glassnode noted that market realignments often need more time or sharper price corrections. These conditions delay a sustainable recovery. Michael van de Poppe observed weakness in the first week of each month.
He linked it to unemployment data releases and the ongoing US shutdown. However, he remains optimistic that November will end in the black.
The analyst identified $107,000 as a key support level. He warned that a breakdown could trigger a liquidity sweep below $103,000 before any rebound. Conversely, a decisive move above $112,000, he said, could pave the way for a new all-time high.
US Shutdown Won’t Derail November Rally, Says Expert
Crypto analyst Ash Crypto drew parallels between the current Bitcoin correction and last year’s sharp recovery. He recalled that in November 2024, Bitcoin fell from $71,000 to $66,000.
In the crypto market, it then surged 60% to $108,000 within 45 days. During the same period, Ethereum surged by 75%, while the altcoin market cap increased by 138%.
Thus, despite the recent crypto market correction, the analyst remains bullish for a Q4 rally. Ash Crypto argued that the market “only needs 45 days to deliver explosive parabolic returns.” He believes that a similar setup is forming now.
He pointed to multiple bullish macro factors. This includes the Fed rate cut in December and the end of quantitative tightening on December 1. A U.S.-China trade deal and rising U.S. equities are also contributing factors.
Bhushan is a FinTech enthusiast and holds a good flair for understanding financial markets. His interest in economics and finance draws his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In his free time, he reads thriller fiction novels and sometimes explores his culinary skills.
