Bitcoin Hits $116K Amid US Shutdown, ETF Inflows Fuel Rally

While the U.S. government officially entered its first shutdown since 2018 due to political stalemates over healthcare funding, Bitcoin demonstrated surprising strength by blasting through $116,000 with a 3% daily gain. The shutdown, affecting 750,000 federal workers and costing approximately $400 million per day, typically creates market uncertainty that would pressure risk assets. However, Bitcoin’s two-day rebound from $112,000 suggests buyers are treating the macro uncertainty as a dip-buying opportunity rather than a reason for retreat.

The cryptocurrency’s performance stands in stark contrast to traditional safe-haven movements, with gold simultaneously sprinting to fresh records near $3,875-$3,895 per ounce. Bitcoin’s ability to rally alongside gold during a flight-to-safety backdrop indicates its evolving role in investor portfolios. The total crypto market cap rose 3% to $4.09 trillion, with Bitcoin’s dominance climbing from 57% to 59% – a structure that analysts say tends to produce more durable rallies than altcoin-led surges.

The rally received substantial fuel from U.S. spot Bitcoin ETFs, which attracted $3.53 billion in net inflows during September, culminating with $429.9 million on September 30 alone. Leading the charge were major financial institutions including BlackRock, Ark, and Fidelity, whose continued participation demonstrates institutional confidence in Bitcoin’s long-term prospects. These substantial inflows occurred despite the looming government shutdown, highlighting the strength of underlying demand.

Technical analysts point to a multi-week bull flag pattern with the price now pushing against the upper boundary, mirroring formations seen before previous impulsive moves. On-chain and derivatives data indicate healthy conditions as leverage resets after the recent decline, funding levels normalize, and open interest remains steady. Seasonality also favors continued strength, with ‘Uptober’ traditionally showing strong performance following positive September closes, creating multiple tailwinds for Bitcoin’s upward trajectory.

Telegram’s Pavel Durov reinforced long-term optimism by reaffirming a $1 million Bitcoin target, driven by the cryptocurrency’s fixed supply contrasting with ongoing money printing by central banks. This sentiment often emerges during mid-cycle expansions and reflects growing recognition of Bitcoin’s scarcity value proposition among technology leaders and institutional investors alike.

In the near term, Bitcoin faces significant resistance around $117,500, with analysts including MN van de Poppe, Ted Pillows, and Daan Crypto Trades agreeing that a clear reclaim and daily close above this level could pave the way toward $119,300-$120,300. The psychological $120,000 target represents the next major milestone, but order-book heatmaps reveal approximately $7 billion in short liquidity between $118,000 and $119,000 that could trigger a substantial squeeze if these levels are broken.

On the downside, bulls aim to defend the $114,800-$115,200 zone as primary support, followed by the critical $112,000 pivot identified before the recent bounce. Below that level lies a larger liquidity pocket at $107,000-$108,000 containing roughly $8 billion in potential long liquidations. The consensus strategy among prominent analysts involves holding the $112,000 level, breaking above $117,500 resistance, and allowing momentum to push toward new highs into the fourth quarter, creating a clear roadmap for both bullish and cautious market participants.