Bitcoin News Today: U.S. Shutdown Drains $700B from Markets, Pushing Bitcoin Below $100K as Liquidity Contracts

Market liquidity is contracting across both traditional and digital asset markets, with analysts warning that a recovery will require a period of consolidation amid ongoing economic and political headwinds. The U.S. government shutdown, now in its 36th day, has exacerbated the liquidity crunch by draining $700 billion from financial markets through the Treasury General Account (TGA), according to BitMEX analysts. This has pushed the TGA to a record $1 trillion, starving risk assets-including cryptocurrencies-of capital and driving Bitcoin below $100,000 for the first time since June, according to a Decrypt report.

Corporate earnings reports further underscore the liquidity strain. 3D Systems (NYSE: 3DS) reported a $75.8 million decline in cash and cash equivalents for Q3 2025, driven by operational and financing outflows, according to its Q3 2025 results. Jackson Financial Inc. (JXN) highlighted $216 million in holding company free cash flow but noted liquidity buffers remain above targeted levels in Jackson's Q3 results. Chord Energy (CHRD) disclosed $336.3 million in third-quarter capital expenditures, with liquidity metrics showing $2.1 billion in available resources as of September 30 in the Chord Energy report. These mixed signals reflect sector-specific challenges but align with broader market fragility.

Bitcoin's 19% drop from its October peak has been attributed to a "perfect storm" of its four-year bull cycle nearing exhaustion and the macroeconomic liquidity crisis, per BitMEX. The prolonged shutdown has stalled Treasury drawdowns, delaying injections of cash into risk assets that typically support end-of-year strength. Meanwhile, Bitcoin's price action aligns with historical patterns: after its 2024 all-time high post-ETF approval, the cryptocurrency often declines 70-80% in the following year, according to a Yahoo Finance analysis.

The Federal Reserve's cautious stance on rate cuts and persistent manufacturing contractions-now in eight consecutive months-have compounded investor uncertainty. Compass Point analyst Ed Engel noted that over 1 million Bitcoin has been sold by long-term holders since June, with retail buying weaker than in prior cycles. "We see support above $95k but lack near-term catalysts," he said in a Coinotag report.

Despite the downturn, some analysts remain cautiously optimistic. BlockBeats' Axel highlighted that markets are oversold and could rebound as short positions unwind, though a consolidation phase is likely before a sustained recovery, according to a Weex analysis. BitMEX expects a "snap-back" in liquidity once the shutdown ends, with hundreds of billions re-entering markets and aligning with Bitcoin's seasonal strength.

For now, investors face a delicate balancing act. While corporate cash flows and crypto fundamentals show resilience, the interplay of political gridlock, economic weakness, and institutional selling leaves markets vulnerable to further volatility.