Bitcoin rebounds to ~$106K as U.S. shutdown progress lifts risk assets

Bitcoin bounced back above $106,000 on Monday after clawing out from last week’s drop below $100,000, as traders responded to signs that the U.S. government shutdown could finally be coming to an end.

The return of risk-on sentiment also sent Ripple and Solana higher, climbing 10% and 3% respectively.

At the same time, Trump floated the idea of a $2,000 “dividend” for Americans, funded by tariff revenue, an announcement that helped tech stocks push the S&P 500 and Nasdaq even higher.

The potential reopening would also allow the release of economic data, which the Federal Reserve needs to decide whether to cut rates again at its next meeting in December. If the labor market shows signs of weakness, rate cuts are back on the table. This is particularly relevant for crypto because looser policy often boosts investor appetite for Bitcoin.

On that front, John Williams, who runs the Federal Reserve Bank of New York, recently said the Fed might need to expand its balance sheet through bond purchases, another signal that more cash could be injected into the financial system.

That possibility was picked up in a report by 10X Research, which stated, “A potential Fed balance-sheet expansion, and especially a December rate cut, would be unequivocally bullish for Bitcoin and could reignite the broader bull market.”

But the same note warned that unless the Fed actually follows through, the bounce from the shutdown progress might be short-lived. “Our base case is that this government-reopening bounce provides only temporary support, and that ETF outflows are likely to resume unless the Fed moves to cut or meaningfully expand liquidity,” the authors added.

Technical support and derivatives data show mixed picture

The rally came after a rough stretch in October when Bitcoin dropped from a record high above $126,000 to just under $100,000, as leveraged trades got wiped out and long-time holders took profits.

But Nikolaos Panigirtzoglou, a managing director at JPMorgan, said in a recent note that the worst of that pullback is now in the rearview. “The deleveraging episode is largely behind us,” Nikolaos wrote, adding that Bitcoin could rally toward $170,000 over the next 6 to 12 months.

The Relative Strength Index (RSI) bounced from under 30, suggesting that heavy selling may have cooled. A slight improvement in cumulative volume delta also shows sellers are getting quieter and buyers are stepping back in. Spot market activity is still running high, hinting that interest remains strong, especially if Bitcoin can push above $111,000 toward $116,000, a resistance zone traders are watching closely.

In derivatives, Bitcoin open interest is still slowly dropping, while options markets are still defensive, with many traders holding downside protection, but the shrinking volatility spread hints that fear is fading.

On-chain data looks better: transfer volumes are rising, address activity is stable, and transaction fees remain steady, all signs of a functioning network, according to Glassnode.

Profitability still looks rough. Short-term holders are deep in the red, with unrealized losses rising. But these conditions often come before accumulation phases, when stronger investors buy up supply from weaker hands. Right now, Bitcoin is hovering in a range between $100K and $108K, and that zone could become a new support base, even as the broader profitability downtrend continues to weigh on sentiment.