US funding deal halts crypto selloff

TLDR

A last minute US government funding deal ending a brief shutdown has calmed risk markets and helped stop a sharp crypto selloff, but prices remain under heavy pressure.

1. US lawmakers narrowly passed a bill reopening most agencies and extending funding into late 2026, removing immediate shutdown risk that had spooked Bitcoin, Ethereum, and other risk assets.
2. Bitcoin rebounded from lows near 73,000 dollars toward the mid 70,000s and total crypto market value stabilized around 2.6 trillion dollars, after liquidations and risk aversion drove steep weekend losses.
3. Relief may be temporary, as markets still face extreme fear, continued selling from ETFs and miners, and new macro catalysts including February data and the next funding deadline.

Deep Dive

1. How The Funding Deal Changed The Picture

The US House passed a narrow 217 to 214 funding package that will reopen the federal government from a partial shutdown as soon as the president signs it, funding most agencies through September 2026 and leaving only the Department of Homeland Security on a shorter leash into mid February. This agreement removed immediate fears of a prolonged shutdown that had delayed economic data, increased political uncertainty, and weighed on risk sentiment across equities and crypto.

Reports note that the announcement of the funding package halted an ongoing, panic style plunge in crypto, with Bitcoins fall stalling almost immediately after news of the deal reached markets.

2. How Crypto Actually Reacted

Before the deal, Bitcoin briefly dropped to around 72,800 to 73,100 dollars, its weakest level since before the 2024 US election, as thin weekend liquidity, forced liquidations, and broad risk aversion hit the market. After the shutdown deal, Bitcoin bounced back into the mid 70,000s and Ethereum recovered from lows near 2,200 dollars, while total crypto market capitalization steadied around 2.6 to 2.7 trillion dollars according to multiple market reports.

At the same time, aggregate data shows the total crypto market cap is still down a little over 2 percent over the past day, and a fear and greed index reading near 14 signals extreme fear, meaning confidence remains fragile even after the bounce. Correlations between crypto and major stock indices are high over the last 24 hours, which fits a picture of crypto trading like other risk assets that responded positively when shutdown risk faded.

3. Remaining Risks And What To Watch

Several of the drivers that pushed crypto lower are still in play, including selling from Bitcoin ETFs and miners, concerns about a more hawkish Federal Reserve, and reduced risk appetite during macro uncertainty. The shutdown story is also not fully resolved, since funding for the Department of Homeland Security only runs to mid February, creating another potential flashpoint if talks stall again.

Macro data delayed by the shutdown, such as jobs figures and inflation later in February, will now land into a market already on edge, and could easily revive volatility in both stocks and crypto. On chain and derivatives data show leverage has been reduced but not washed out, so another negative macro surprise could trigger fresh liquidations if prices revisit recent lows around 73,000 dollars for Bitcoin or if total crypto market cap breaks meaningfully below the mid 2 trillion zone.

Conclusion

The US funding deal ending the brief government shutdown removed an immediate political shock, which was enough to stop a sharp crypto selloff and spark a modest rebound. However, the underlying environment is still one of extreme fear, high macro sensitivity, and unresolved policy and flow risks. Until macro data and future funding deadlines pass without new shocks, crypto is likely to trade more on US political and economic headlines than on purely crypto specific stories.