Bitcoin experienced a significant price decline on Wednesday, falling sharply by 3.6% from an intraday high of $105,316 to a low of $100,803. This occurred despite concurrent climbs in U.S. stocks and gold, as markets anticipated a crucial House vote aimed at ending a protracted government shutdown. At the time of writing, Bitcoin was trading at $101,640, having been over $104,500 earlier in the day.

The pullback in Bitcoin's price is attributed by analysts to investors rotating towards traditional assets, which offer clearer exposure to economic policy, alongside factors such as profit-taking and reduced institutional flows. Despite the recent drop, Bitcoin may be approaching a short-term bottom. Its Net Unrealized Profit (NUP) ratio, a key indicator of coins held in profit, has fallen to 0.476, a level historically associated with market bottoms. Similar readings earlier in 2024 were followed by rebounds of 15–25% in the subsequent month.

A major contributing factor to market uncertainty is the ongoing U.S. government shutdown. The House of Representatives is expected to vote on a Senate-backed bill to resolve the record-long shutdown, with President Trump having indicated his readiness to sign the measure. House Speaker Mike Johnson expressed optimism about securing its passage, despite the challenges of rallying his narrow GOP majority.

The shutdown's impacts continue to be widespread, including nearly 900 flight cancellations—though air traffic control staffing issues are reportedly easing—and disruptions to federal services affecting millions of Americans, such as SNAP recipients. Political tensions are escalating, with House Democrats pressing for accountability and criticism directed at Senate Democrats who sided with Republicans on the funding measure. The vote represents a critical juncture in the standoff, with Congress facing mounting pressure to restore normal operations and the administration preparing for a swift reopening.

Adding to market complexities is the Federal Reserve's cautious stance on monetary policy. Traders are assigning approximately a 72% probability to a 25-basis-point rate cut in December, though Fed officials remain divided between concerns over inflation and slowing economic growth. Following a previous meeting, Federal Reserve Chair Jerome Powell suggested that internal policy disagreements and a lack of federal government data made further interest rate cuts unlikely for the year. However, the Fed proceeded to cut rates by a quarter percentage point, emphasizing that the government shutdown had hindered the release of vital employment and inflation data, creating significant uncertainty for policymakers.

Powell elaborated that the Fed had to rely on a diverse array of data sources, including private surveys, in-house research, and informal interviews, likening the decision-making environment to “driving in the fog.” This situation highlights how the prolonged government shutdown, then in its second month, stalled the release of crucial economic indicators, complicating the Fed's ability to respond effectively to economic changes, even amidst public calls from President Donald Trump for further rate reductions. This confluence of political and economic uncertainties continues to influence market sentiment, impacting assets like Bitcoin, which had seen its price slump below $100,000 on several occasions recently, after being around $109,000 in late October.