Crypto Market Loses $100B Amid US Shutdown Fears, Bitcoin Falls 3.4%
Global Cryptocurrency markets tanked over the weekend, shedding about $100 billion in total market capitalization...
Quick overview
- Global cryptocurrency markets lost approximately $100 billion in market capitalization over the weekend, dropping from $2.97 trillion to $2.87 trillion.
- Bitcoin and Ether experienced declines of 3.4% and 5.3%, respectively, amid rising fears of a potential US government shutdown.
- The sell-off was exacerbated by the liquidation of $360 million in leveraged positions, with $324 million in long positions closed out in just 24 hours.
- Historical trends indicate that the crypto market is highly sensitive to US government disruptions, with analysts predicting continued volatility until political uncertainties are resolved.
Global Cryptocurrency markets tanked over the weekend, shedding about $100 billion in total market capitalization. The data we’ve got shows the market plummeted from $2.97 trillion to $2.87 trillion in just 6.5 hours on that Sunday, January 25, at 9:30pm UTC. We’re talking about a 3.4% drop for Bitcoin, the number one digital asset, and a 5.3% loss for Ether – reflecting the general market downturn.
This sell-off occurred at the same time fears of a US government shutdown were ramping up rapidly. Senate Democrats were telling everyone that they’d block funding packages if those packages included any allocations for the Department of Homeland Security, and were using that as an excuse to express their concerns over border enforcement and immigration policy. Then Senate Democratic leader Chuck Schumer came out and said that if funding bills weren’t addressing these issues, they’d be facing opposition fast. As a result, there was a whole lot more uncertainty hanging over the whole thing.
Key Market Movements
It’s pretty clear that the crypto market’s volatility was becoming a whole lot worse as a whole bunch of leveraged positions started getting liquidated – all of it coming at a pretty steep price:
🚨BIG WARNING: THE BIGGEST THREAT TO CRYPTO IS BACK.
The probability of a US government shutdown by January 31 has exploded to nearly 80%.
Just a day ago, it was only around 10%-15%.
And this is a serious liquidity risk for crypto.
Democrats have made it clear they will block… pic.twitter.com/QRyhpPPaGp
— Crypto Rover (@cryptorover) January 25, 2026
- A total of $360 million in leveraged positions got closed out over the last 24 hours.
- A staggering $324 million in long positions were liquidated, according to data from Gate.
- Prediction markets like Kalshi and Polymarket are showing a whopping 78-80% chance of a US shutdown by January 31
Investors were running for the exits with some pretty aggressive selling, partly because of a few comments earlier from President Donald Trump that hinted at the possibility of tariffs on Canada if it were to get a trade deal with China. Meanwhile, US military deployments to the Middle East were just making things even more tense – particularly with the situation in Iran going the way it was.
Historical Impact of Shutdowns
Looking back at past trends, though, it becomes pretty clear that the crypto market is highly sensitive to disruptions in the US government. When last year’s 43-day shutdown ran from October 1 through November 12, 2025, Bitcoin went from its all-time high of $126,080 straight down to $100,000. And that really wasn’t just a result of delays in getting the congressional funding for the 2026 fiscal year – the whole thing was compounded by a lot of other geopolitical and trade tensions, and in particular, the whole thing about tariffs against China.
It seems the crypto markets will stay pretty jittery until things in Washington start to calm down and some of the global economic risks ease. Market analysts say Bitcoin and many other major cryptocurrencies may remain under pressure until things get sorted out.
If you really want to get a handle on just how volatile things can get in the crypto market, you might want to take a close look at some of the prediction markets, and also keep up with all the latest developments in the way of geopolitics. That way, you can stay pretty well ahead of the curve when it comes to risks and volatility.
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