Bitcoin’s Next Move: BTC Could Surge Past $112K After U.S. Shutdown Ends

Introduction: Bitcoin at a Critical Crossroad

Bitcoin (BTC) is once again standing at a crucial technical and psychological juncture. After briefly reclaiming $106,000 earlier this week, the world’s leading cryptocurrency is showing signs of renewed strength. However, macroeconomic uncertainty in the United States — especially the prolonged government shutdown — continues to shape market behavior.

At the same time, concerns over AI sector overvaluation, sluggish consumer spending, and mixed corporate earnings have made investors more conservative. These overlapping forces are creating a delicate balance between optimism and skepticism in both traditional and digital asset markets.

The question many traders are now asking: Can Bitcoin break above $112,000 — and stay there?

How the U.S. Government Shutdown Impacts Bitcoin

Historically, political gridlocks in Washington have created ripple effects across all financial markets. The current U.S. government shutdown has caused widespread disruptions, including thousands of canceled flights, reduced federal operations, and delayed infrastructure spending.

According to Yahoo Finance, the Federal Aviation Administration (FAA) has been forced to scale back operations, resulting in over 5,000 flight cancellations nationwide. Many air traffic controllers have gone unpaid for nearly a month, causing further strain on transportation and consumer activity.

This uncertainty has pushed some investors to seek alternative assets — including Bitcoin — as a hedge against economic instability. As a non-sovereign store of value, Bitcoin often benefits when confidence in government institutions weakens.

However, analysts warn that optimism tied solely to the end of the shutdown may be short-lived. While a government reopening could trigger a temporary relief rally, a sustainable breakout beyond $112,000 will likely require broader economic stabilization and stronger institutional inflows.

Market Reaction: Bitcoin Follows Nasdaq’s Recovery

On Monday, the Nasdaq Composite Index climbed 1.5%, marking a rebound for tech and growth stocks after several weeks of volatility. Bitcoin mirrored this movement, reclaiming the $106,000 mark in tandem with risk assets.

This correlation highlights a growing trend: Bitcoin’s sensitivity to broader market sentiment. Although BTC is often seen as “digital gold,” its short-term price action continues to align closely with equities — especially during macroeconomic stress.

The recent uptick in Bitcoin came amid speculation that Congress could soon reach a funding agreement to end the shutdown. But as the U.S. Supreme Court questions President Donald Trump’s import tariff powers, markets remain cautious about the long-term implications for trade and inflation.

Derivatives Data Reveal Trader Skepticism

While Bitcoin’s price movement appears encouraging, the underlying derivatives market tells a more cautious story.

1. Futures Market Shows Weak Bullish Conviction

Data shows that two-month BTC futures are trading at a 4% premium over spot prices — below the 5% threshold typically viewed as neutral. This indicates that professional traders and institutions are not aggressively taking long positions, reflecting uncertainty about the sustainability of the current rally.

Additionally, over $270 million in leveraged positions were liquidated earlier in the week after Bitcoin fell below $107,000, shaking trader confidence.

2. Options Market Turns Neutral-to-Bearish

The BTC options skew — which measures demand for put (sell) vs. call (buy) options — dropped to 6% on Monday. That level sits right at the edge of a neutral-to-bearish sentiment, suggesting that traders see limited near-term upside.

Historically, when the skew rises above 10%, it signals widespread fear of a correction. The fact that it remains subdued implies traders are waiting for clearer macroeconomic signals before making large directional bets.

Retail Sentiment: Flat Funding Rates Indicate Hesitation

Retail traders — who typically dominate perpetual futures — also appear cautious. The funding rate for Bitcoin perpetual contracts currently stands at around 5%, below the healthy 6–12% range seen in bullish markets.

Under normal conditions, positive funding rates reflect the cost of maintaining long positions, signaling trader confidence. But the current muted rate suggests lack of enthusiasm for leveraged longs, even after Bitcoin tested the $100,000 support level on Friday.

This does not necessarily mean traders are bearish — it more likely reflects a wait-and-see approach, as investors assess whether the U.S. economy is heading toward a recession or merely experiencing a temporary slowdown.

Macro Headwinds: AI Hype and Weak Earnings Weigh on Risk Assets

Beyond crypto-specific dynamics, broader macroeconomic trends are limiting Bitcoin’s upside potential.

AI Valuation Concerns

Artificial intelligence stocks — once the darlings of Wall Street — are now facing valuation fatigue. Investors fear that the sector’s sky-high earnings expectations may be unsustainable, leading to a pullback in tech-driven risk appetite.

Weak Consumer Spending and Earnings

At the same time, recent corporate earnings reports from consumer-focused companies have disappointed, suggesting that households are tightening spending. This slowdown affects the entire risk spectrum — from growth equities to cryptocurrencies — as investors seek safety over speculation.

These factors collectively contribute to reduced liquidity and lower volatility, making it difficult for Bitcoin to sustain momentum despite favorable narratives.

Why Bitcoin Still Holds Long-Term Appeal

Despite the short-term uncertainty, Bitcoin’s long-term investment thesis remains intact. Each time macroeconomic instability hits traditional markets, BTC attracts renewed attention as an uncorrelated, decentralized asset.

Several underlying factors continue to support its long-term case:

Scarcity: With only 21 million coins ever to exist, Bitcoin remains one of the most scarce assets in history.
Institutional adoption: Asset managers and ETFs continue to expand Bitcoin exposure, reinforcing its legitimacy.
Halving cycle momentum: The upcoming Bitcoin halving event in 2028 historically precedes major bull runs, offering cyclical upside potential.
Global demand for alternatives: As governments grapple with debt, inflation, and political conflict, Bitcoin’s narrative as “digital gold” strengthens.

In short, while traders may hesitate in the short term, long-term investors continue to accumulate during consolidation phases like this.

What Could Trigger Bitcoin’s Next Breakout?

Analysts identify several key catalysts that could push Bitcoin beyond $112,000 and possibly toward $120,000 in the coming months:

Resolution of the U.S. government shutdown, leading to improved investor confidence.
Positive U.S. inflation and employment data, reducing recession fears.
Renewed institutional inflows into Bitcoin ETFs and derivatives markets.
Weakening of the U.S. dollar index (DXY), historically correlated with BTC strength.
Recovery in AI and tech equities, signaling broader risk-on sentiment.

If these factors align, Bitcoin could experience a short squeeze, forcing traders with bearish positions to buy back BTC at higher prices — accelerating the rally.

Conclusion: Bitcoin’s Path to $120K Depends on Macro Confidence

Bitcoin is once again reflecting the mood of global markets. While its technical setup hints at a potential breakout above $112,000, achieving that milestone — and sustaining it — depends heavily on macroeconomic confidence and trader conviction.

The end of the U.S. government shutdown could certainly provide a short-term boost, but long-term growth will rely on deeper fundamentals: economic recovery, institutional support, and renewed enthusiasm among retail investors.

For now, Bitcoin’s next major move could shock traders — but whether it’s upward or downward will depend on how quickly the U.S. economy regains its footing.

As uncertainty lingers, the smartest strategy may be patience: observe the data, manage risk, and prepare for volatility. Because if Bitcoin does clear the $112,000 mark, the next phase of the bull market could unfold faster than anyone expects.