Bitcoin has staged a remarkable recovery, regaining ground to settle at approximately $106,000 over the weekend after a turbulent week that saw the cryptocurrency plunge below the $100,000 mark. This rebound coincided with positive developments in the U.S. Congress, where lawmakers have made strides toward ending the protracted government shutdown.
The past week began on a sour note for Bitcoin, which experienced a steep decline of about 10% at its lowest point, hitting a concerning low of $99,000 on Wednesday. The downturn initially set alarm bells ringing among traders and analysts alike.
The catalyst for this decline was news of investor Michael Burry’s establishment of a $1.2 billion short position on AI stocks such as Nvidia and Palantir, which rattled the U.S. stock markets. This trigger ignited a broader market downturn on Tuesday, affecting all three major stock indexes and causing Bitcoin to fall by about 5% on the same day. The cryptocurrency sector was notably hard hit, with many altcoins suffering from even more severe losses.
Institutional investors have reportedly been backing away from crypto markets, a trend that had been noticeable since October 10. The turmoil in the stock market exacerbated this flight, disrupting the balance of supply and demand in the crypto space.
Critical Support Level Holds
The pivotal $100,000 psychological support level was breached on Wednesday, which had traders closely monitoring the situation. However, the 365-day moving average soon emerged as a critical line of defense, holding firm against further declines. Analysts frequently consider this average a harbinger of bear market signals, but Bitcoin managed to find sustained buying interest at this level, setting the stage for a recovery.
This marks the third instance in recent months where the 365-day moving average held strong; similar support had been witnessed during trade crises in August 2024 and April 2025. Notably, Ethereum also experienced a significant downturn, dropping to $3,100 midweek but bouncing back to over $3,600 by Sunday, closing with a less intense weekly loss of 6.55%.
Government Shutdown Progress Sparks Rally
The extended government shutdown, now in its fifth week, has furloughed approximately 750,000 federal employees and resulted in disrupted essential services, including increased flight delays due to unpaid air traffic controllers. Analysts have speculated that the ongoing shutdown has severely curtailed market liquidity, with some suggesting that a resolution could lead to a swift resurgence in crypto values.
On Sunday, Senate Majority Leader John Thune provided a glimpse of optimism, indicating that a deal to resolve the shutdown could be reached shortly. His remarks prompted an immediate rally in Bitcoin’s price. Following a successful vote in the Senate, which passed the funding bill with a 60-40 margin, the eventual financing plan appears set to sustain government operations until January 30, 2026.
The anticipated agreement saw betting markets adjust their expectations, shifting the expected date for the shutdown’s conclusion from November 20 to November 11.
Trump’s Dividend Post Adds Fuel
Further adding fuel to Bitcoin’s recovery was a social media post from former President Trump, which hinted at potential dividend payments resulting from tariff adjustments. Trump suggested that Americans could receive at least $2,000 each from the federal government, stirring hopes that such funds might flow into investments like stocks or cryptocurrencies.
Subsequently, Bitcoin surged from $103,000 to over $105,000 following Trump’s post, closing the weekend at approximately $106,330 and reducing weekly losses to 5%. Meanwhile, traders are gearing up for a week filled with anticipated Federal Reserve speeches, gauging potential insights regarding future rate cuts at the upcoming FOMC meeting.
As the Senate prepares for its initial procedural vote on the funding bill, the atmosphere remains charged with speculation and hope for market stability and recovery.
