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Bitcoin prices were largely stable on Thursday, consolidating near $122,000 after a volatile week that saw the token hit record highs above $126,000.
As of 02:20 ET (06:20 GMT), the world’s largest cryptocurrency was up 0.1% at $121,969.5, easing slightly as investors weighed profit-taking pressures and lingering macroeconomic uncertainty tied to the ongoing U.S. government shutdown.
Shutdown Worries and Fed Minutes Cool Risk Appetite
The extended U.S. government shutdown, now in its second week, continued to weigh on market sentiment by delaying key economic data releases and amplifying fiscal concerns.
Meanwhile, the Federal Reserve’s September meeting minutes revealed that a “substantial majority” of officials supported further rate cuts this year to protect the labor market, though others urged caution given persistent inflation risks.
The minutes underscored divisions within the Fed, with several policymakers preferring to pause rate adjustments until clearer signs of economic cooling appear. Investors are now focused on Chair Jerome Powell’s remarks at a Washington conference later today for more policy clues.
In parallel, the U.S. Dollar Index gained over 1% this week, rebounding from recent lows as risk aversion drove safe-haven demand — a move that partly challenged the “debasement trade” narrative that had supported Bitcoin and gold in recent sessions.
ETF Inflows and the “Debasement Trade” Narrative
Bitcoin’s recent rally was fueled by strong institutional inflows into U.S.-listed spot Bitcoin ETFs, which continue to attract investors seeking regulated exposure.
Additionally, some traders have been positioning Bitcoin as part of a “debasement trade,” rotating away from fiat currencies amid fiscal uncertainty and anticipated monetary easing.
However, with the dollar rebounding, that thesis has softened, leading to consolidation below record highs as short-term traders lock in profits.
Altcoins Mixed as Market Pauses
Broader crypto markets showed a mixed performance on Thursday, mirroring Bitcoin’s consolidation:
- Ethereum (ETH) dipped 0.6% to $4,428.24.
- XRP rose 1.2% to $2.82.
- Solana (SOL) gained 3%, while Cardano (ADA) and Polygon (MATIC) traded flat.
- Dogecoin (DOGE) advanced 1.1%, and $TRUMP token added 2%.
Outlook
Analysts expect Bitcoin’s short-term movement to remain rangebound between $120,000 and $125,000, with volatility tied closely to U.S. fiscal developments and Powell’s upcoming remarks.
A sustained break above $126,000 could reopen bullish momentum toward $130,000, while prolonged uncertainty around the government shutdown may cap upside potential in the near term.
