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Bitcoin’s 2018 Bottom Aligned With U.S. Shutdown — Will History Repeat?
Today’s U.S. government shutdown coincides with record-breaking gold prices and the largest leverage flush-out in crypto’s history, adding layers of uncertainty across global markets. With economic data releases delayed, traders are revisiting how previous shutdowns have shaped market behavior.
The last major government shutdown — spanning Dec. 22, 2018, to Jan. 25, 2019 — notably overlapped with Bitcoin’s 2018 bear market low. During that period, BTC plunged from roughly $6,000 in mid-November 2018 to just above $3,000 by December, marking the final capitulation of that cycle.
The bottom formed in the week of Dec. 17, after which Bitcoin staged a sustained rebound. Following the government’s reopening, BTC posted seven consecutive weekly gains through February and April, climbing above $5,000 and confirming a shift in momentum.
While correlation doesn’t imply causation, the timing of the 2018 rebound has traders speculating whether a similar dynamic could emerge this time. Since the latest shutdown began, Bitcoin has slipped 1%, mirroring the Nasdaq’s 1% decline amid broader risk-off sentiment.
Leverage Wipeout Resets Crypto Market
Friday saw the largest liquidation event in crypto history, with more than $20 billion in leveraged futures positions across Bitcoin, Ether, and altcoins wiped out in a single day.
Bitcoin briefly plunged to $107,000 on Coinbase, its lowest level since July, while other exchanges recorded even deeper lows. According to CoinMetrics, the event acted as a structural “reset” rather than a systemic failure.
“In the end, the great de-leveraging was a stress event rather than a collapse,” CoinMetrics wrote. “While disruptive, it purged excess leverage and leaves the market in a healthier position.”
Gold’s Surge Strengthens Bullish Case
At the same time, gold has soared past $4,200 per ounce for the first time, rallying 61% year-to-date and 10% since the shutdown began. Silver, palladium, and platinum have also surged in tandem, reinforcing gold’s role as a safe-haven amid policy uncertainty.
Historically, Bitcoin tends to lag gold’s rallies by around 100 days, according to analyst Joe Consorti. If that relationship holds, and using JPMorgan’s volatility-adjusted fair value model, Bitcoin could be valued near $165,000 by year-end once the yellow metal’s rally stabilizes.
Outlook: A Foundation for the Next Move?
The combination of record gold prices, a leverage reset, and anticipation of Federal Reserve rate cuts could set the stage for Bitcoin’s next major uptrend. Whether the current shutdown becomes another historical inflection point — as it did in 2018 — remains to be seen.
