Bitcoin's $125k Record Fueled By US Gov't Shutdown, Macro Factors: Analysts

Bitcoin breached a new all-time high over the weekend, prompting analysts to call for a renewed accumulation phase that could fuel a rally to $150,000 before the end of the year.

Bitcoin (BTC) set a new all-time high above $125,700, and its market capitalization briefly crossed the $2.5 trillion milestone for the first time in crypto history, Cointelegraph reported earlier on Sunday.

The rally was supported by multiple macroeconomic factors, including the recent US government shutdown — the first since 2018 — which some analysts say has renewed interest in Bitcoin’s store-of-value role.

In the past, similar conditions have led to “major price milestones,” according to Fabian Dori, chief investment officer at digital asset banking group Sygnum Bank.

The US government shutdown has “renewed discussion around Bitcoin’s store-of-value role, as political dysfunction underscores interest in decentralised assets,” Dori told Cointelegraph. “At the same time, the broader environment — characterised by loose liquidity conditions, a service-led acceleration in the business cycle, and narrowing underperformance relative to equities and gold — has drawn attention to digital assets,” he added.

BTC/USD, year-to-date chart. Source: Cointelegraph/TradingView

However, the extent of the government shutdown’s tailwind effect on the crypto market will ultimately depend on how it influences the US Federal Reserve’s perspective on interest rate decisions, Jake Kennis, senior research analyst at Nansen, told Cointelegraph.

“Crypto markets could benefit from a shutdown resolution if it reduces uncertainty and pushes the Fed toward a more dovish stance,” Kennis added.

While some analysts saw the government shutdown as a signal of a potential crypto market bottom, Kennis said it’s “premature to call this a local market bottom,” as confirmation would require “multi-week stability above key support levels.”

Related: Bitcoin ETFs kickstart ‘Uptober’ with $3.2B in second-best week on record

Bitcoin enters new accumulation phase

Some analysts view Bitcoin’s recent growth as a sign of a new accumulation phase by large entities, as onchain data suggests a decline in selling pressure from whales.

“Market data indicates the current price action may be linked to an accumulation phase,” said Sygnym Bank’s Dori.

“Selling pressure from long-term holders appears to be easing, while short-term investors show signs of stabilisation after a period of realised losses.”

Periods of “cooling speculative activity and steadier positioning” have historically preceded significant Bitcoin rallies, he added.

Related: Crypto trader turns $3K into $2M after CZ post sends memecoin soaring

Meanwhile, Bitcoin’s open interest “reset sharply” after last week’s options expiry, which may “set the stage” for the fourth quarter, according to blockchain data platform Glassnode.

Slowing speculative activity may attract more attention to Bitcoin, reinforcing analyst predictions of a breakout to $150,000 in the fourth quarter of 2025 if BTC can sustain its momentum above the key $120,000 psychological level, Charles Edwards told Cointelegraph at Token2049.