Bitcoin is approaching a significant macro event as U.S. legislators rush to find a way to prevent another federal government shutdown ahead of the January 30 budget allocation deadline. The market is facing pressure after a failed rally in January and a sudden shift in sentiment.
In the past, Bitcoin has not exhibited behavior as a reliable hedge during U.S. government shutdowns. Conversely, prices tend to move according to existing market momentum.
Why is the U.S. government shutdown issue resurfacing?
The risk of another federal government shutdown arises as Congress has yet to finalize the FY2026 annual budget. A temporary budget will expire on January 30, and negotiations remain stalled, particularly regarding the budget for the Department of Homeland Security.
Unless legislators pass a new temporary budget resolution or approve the full annual budget before the deadline, parts of the U.S. federal government will begin to shut down immediately, leading the market to see January 30 as a macro event with two options.
Bitcoin's price movements throughout January 2026 reflect increasing vulnerability, as it briefly spiked to the 95,000–98,000 USD range in mid-month but could not sustain the level and sharply reversed downward.
Bitcoin's past performance during U.S. government shutdowns does not support any bullish trend.
Throughout the four government shutdown events in the past decade, Bitcoin declined or extended existing downward trends in three instances.
Only during a temporary disruption in February 2018 did Bitcoin have a slight rally, resulting from a technical rebound in an over-sold condition rather than a direct response to a shutdown.
Overall trends are aligned in the same direction, as government shutdowns often trigger volatility rather than dictate market direction. Bitcoin tends to extend existing trends rather than reverse them.
The data from miners reflects pressure, not strength
Recent blockchain data adds another layer of caution, as CryptoQuant reports that large mining companies in the U.S. have significantly reduced production in recent days due to winter snowstorms limiting power supply.
Daily Bitcoin production has visibly decreased in companies like CleanSpark, Riot Platforms, Marathon Digital, and IREN. Although lower production helps limit short-term selling supply, this situation reflects operational stress in the mining sector.
Historically, limited supply from miners has often been insufficient to offset selling pressure driven by macro factors unless demand signals are at the current strong level. Demand signals remain weak.
Realized losses are on the rise
Net Realized Profit and Loss (NRPL) data also supports a precautionary view. In recent weeks, there has been an increase in realized losses, with a peak in profit-taking compared to early 2025.
This reflects that many investors are gradually exiting their positions by choosing to sell at unfavorable prices rather than confidently reallocating funds. Such behavior often occurs in late cycles and during risk distribution, not accumulation.
In such situations, negative macro news often accelerates downward volatility rather than creating long-term rebounds.
How might Bitcoin respond on January 30?
If the U.S. government enters a shutdown on January 30, Bitcoin is likely to respond as a risk asset rather than a safe-haven asset.
The most likely outcome is short-term volatility with downward pressure. If prices break below January's lows, it will align with past behavior during shutdowns and the current market structure. Rebounds are likely to occur technically and may only be brief unless overall liquidity improves.
The chance of a significant price spike solely from shutdown news appears low, as Bitcoin rarely experiences strong surges during shutdowns without capital inflows and positive sentiment signals, which are currently absent.
Bitcoin does not face shutdown risks from a strong position; outflows from ETFs, rising realized losses, stress in the mining sector, and rejected resistance levels all point to a situation that requires extreme caution.
As January 30 approaches, the risk of government agency shutdowns may become a test of already fragile market confidence.
For now, history and data suggest that Bitcoin's response will reflect existing trends rather than counter them.
