Bitcoin News Today: U.S. Government Shutdown Sparks Bitcoin Surge as Capital Flees Uncertainty

Bitcoin exchange inflows surged to record levels in October 2025 amid heightened market volatility, driven by institutional demand and macroeconomic tailwinds. The cryptocurrency reached an all-time high of $125,599 on October 5, fueled by $3.24 billion in net inflows into U.S. spot Bitcoin ETFs over the preceding week-the second-largest weekly total since their January 2024 launch. BlackRock's iShares IBIT and Fidelity's FBTC accounted for 60% of U.S. spot ETF volume, with IBIT alone capturing $1.8 billion in inflows, pushing its assets under management to $96.2 billion $135,000–$150,000^[4]. This influx coincided with a 14% decline in exchange-held Bitcoin supply, as custodians withdrew 37,000 BTC from centralized platforms, tightening liquidity and reinforcing price support $135,000–$150,000^[4].

Short liquidations also accelerated price discovery, with $131.96 million in BTC short liquidations recorded in 24 hours, according to Coinglass data Bitcoin Could Reach $133.5K After New $125.6K High as Short ...^[2]. The move past key resistance levels at $117,000 and $124,000, combined with ETF-driven demand, created a self-reinforcing cycle of supply compression and bullish momentum. Analysts attributed the surge to a combination of "Uptober" seasonality-historically a strong month for Bitcoin-and macroeconomic factors, including the U.S. government shutdown and expectations of Federal Reserve rate cuts. The shutdown, which began October 1, redirected capital toward non-sovereign assets like Bitcoin and gold, with BTC's 30-day correlation with gold rising to 0.64, the highest since April 2023 $135,000–$150,000^[4].

Technical indicators further supported the bullish case. The STH (short-term holder) realized price model projected a near-term target of $133.5k, based on statistical bands derived from on-chain data Bitcoin Could Reach $133.5K After New $125.6K High as Short ...^[2]. Fibonacci extensions and falling wedge patterns aligned with this projection, while RSI readings near 73 indicated overbought conditions without triggering bearish reversals. Institutional buyers, including BlackRock and Fidelity, were seen accumulating Bitcoin ahead of the 2026 halving event, with ETF AUM surpassing $164 billion as of October 5 $135,000–$150,000^[4]. Meanwhile, Ethereum ETFs mirrored the trend, recording $1.3 billion in weekly inflows after a prior week's outflow, signaling broader institutional re-entry into crypto markets $135,000–$150,000^[4].

The U.S. government shutdown amplified risk-off sentiment, with investors seeking alternatives to traditional assets. Historical data showed October delivering an average 20% return for Bitcoin, second only to November's 46% $135,000–$150,000^[4]. The shutdown's timing-coinciding with delayed economic data releases and a weakening dollar-further spurred demand for Bitcoin as a hedge against political uncertainty. Deutsche Bank and JPMorgan reiterated $150,000 year-end targets, citing ETF-driven structural shifts in Bitcoin's demand elasticity and the asset's growing role in diversified portfolios $135,000–$150,000^[4].

Despite the bullish momentum, analysts cautioned that volatility would persist, with 14-day realized volatility crossing 48% and key support levels at $120,000 and $117,000 under scrutiny. The interplay of ETF inflows, macroeconomic catalysts, and institutional positioning suggested a multi-month accumulation phase, with the next critical resistance at $133.5k. If sustained, this could set the stage for a retest of $150,000 by early 2026, aligning with historical patterns of parabolic rallies preceding halving events $135,000–$150,000^[4].