#PartialGovernmentShutdownEnds

The Partial Government Shutdown Ends — after a short but tense 4-day partial US federal government shutdown (from late January 31 to February 3, 2026), Congress passed a funding package (House vote 217-214), and President Trump signed it into law. Most agencies (Defense, Labor, HHS, Education, Transportation, HUD, State, Treasury, etc.) are now fully funded through September 2026 (end of FY2026). Only the Department of Homeland Security (DHS) received a 2-week continuing resolution until February 13, setting up more negotiations over immigration enforcement and ICE restrictions amid recent controversies.
This brief shutdown stemmed from partisan fights over funding levels and policy riders (especially DHS/immigration after incidents involving federal agents). It was much shorter than past ones (e.g., no repeat of the 43-day record from late 2025), with furloughed workers getting back pay secured.
Impact on the Crypto Market – Detailed Breakdown
The crypto market was already in a deep bearish correction and capitulation phase (BTC down ~45-50% from Oct 2025 ATH >$126K, total cap ~$2.16T-$2.49T, extreme fear on Fear & Greed Index ~5-14). The shutdown added extra pressure through political and macro uncertainty, but its end brought some short-term relief — though not a full reversal.
Key effects during & after the shutdown:
Increased Risk-Off Sentiment & Volatility
Shutdowns create uncertainty → delayed economic data (e.g., January jobs report and CPI pushed back due to agency closures), frozen SEC operations (limited staff halted non-essential work like crypto ETF reviews, exemptions, and guidance). This amplified fear, uncertainty, and doubt (FUD), leading to risk aversion. Crypto, being 24/7 and highly liquid, absorbed disproportionate selling as a "risk asset." BTC dipped sharply (some reports showed intraday lows ~$72,800 during peak panic, later testing below $67K-$64K zones), ETH and SOL also bled hard.
Liquidations & Sell-Off Acceleration
Leverage flush continued — massive longs got wrecked amid broader panic. The brief "data vacuum" (no fresh macro prints) made markets hypersensitive, correlating with tech stock sell-offs and risk-off flows. Crypto saw heightened intraday swings, with BTC/ETH dropping 7-10%+ in sessions tied to shutdown news.
Post-End Relief Rally (Temporary Bounce?)
Once the House passed the deal (Feb 3) and Trump signed it, political uncertainty eased → crypto paused its free-fall. BTC rebounded from lows (e.g., climbing back toward $76K in some snapshots, though still down overall). Markets reacted positively to restored government operations, potential timely data releases, and reduced immediate fiscal cliff fears. Some called it a "relief bounce" or dead cat bounce — stabilization, but not strong accumulation yet. Total cap saw minor recovery attempts, but dominance stayed high (BTC 55-59%), alts still bleeding.
Broader Macro Context
Shutdown highlighted ongoing fiscal and political risks under the current administration.
It overlapped with Fed tightness fears, ETF outflows, geopolitical issues — all fueling the "crypto winter" reset.
No direct crypto regulations in the bill, but SEC slowdown during shutdown delayed potential approvals and innovation. End means normal operations resume, which could help clearer policy visibility long-term.
Crypto often treats US political stability as a proxy for liquidity and risk appetite — resolution removed one headwind, but deeper issues (TGA drains, institutional caution) persist.
Overall Crypto Market Takeaway Right Now (Feb 6, 2026)
The shutdown's end is mildly bullish short-term: reduced FUD, potential for better data flow, slight BTC stabilization. But the market remains bearish — still in capitulation mode, extreme fear dominant, alts crushed, and BTC cracking supports (~$60K-$63K key zone). This wasn't the catalyst for a big reversal; it's more "one less negative" in a tough environment.
Outlook: Watch Feb 13 DHS cliff (could spark more drama), upcoming delayed jobs data, and if liquidations exhaust. Risk management still crucial — stay cautious, no FOMO buys yet. Survivors (BTC/ETH) likely gain share in any prolonged shakeout.