US Government Shutdown Averted For Now — Will Crypto Keep Rallying?

Key Takeaways:

• The US government avoided a shutdown, as a temporary funding bill passed the Senate review.
• Since the announcement, the US dollar index rose 0.8% against the dropping stocks.
• Bitcoin rose as well, possibly regaining its safe haven status.

YEREVAN (CoinChapter.com) — The US Congress passed a stopgap funding measure ahead of a critical midnight deadline on Oct 1, the start of the fiscal year, effectively preventing a government shutdown.

US avoided a government shutdown until Nov 17

In detail, the shutdown refers to the temporary closure of federal government agencies, departments, and services. It can occur when there is a budgetary impasse or disagreement between Congress and the President over government spending priorities.

As CoinChapter reported earlier, the Republican Party, which holds a majority in the US House of Representatives, was divided. Speaker Kevin McCarthy once again found himself in a tight spot.

Some of his party lawmakers refused to back his budget proposals and temporary funding measures. They demanded that McCarthy include their proposals, such as tangible spending reductions and Ukraine funding cuts, before tabling these measures for a vote. 

After weeks of infighting, McCarthy announced the stopgap proposal early on Sep 30, and the bill passed the House with a bipartisan vote, proceeding to the Senate. The bill will keep the government open through Nov 17, including natural disaster aid but no additional funding for Ukraine or border security.

The crypto sector rallied against falling stocks

Meanwhile, the funding bill might directly influence the markets and, by extension, the crypto sector. The US dollar index rose 0.8% after McCarthy’s announcement, paring an equivalent loss on Sep 28. Conversely, a US stock index, the S&P 500, slid 1% lower in the same period, standing at 4285 ahead of the Oct 2 trading session.

Interestingly, the crypto sector, particularly Bitcoin, could have presented a temporary haven for investors against the market instability. The leading digital asset breached the $28,000 ceiling for the first time in six weeks, reaching $28,400 ahead of the New York session on Oct 2, a 10% advance in the previous seven days.

While a correction could follow, on-chain metrics hint at a bullish continuation in October, given historic fractals and ongoing accumulation. Should Bitcoin retain its safe haven status longer, a bullish continuation could bring the alpha crypto to $30,000 by year’s end.