Crypto Market Faces Uncertainty Amid US Shutdown Risk
- US shutdown risks impact crypto markets with Bitcoin and Ethereum declines.
- Financial uncertainty grips investors globally.
- Historical precedents indicate cryptocurrency volatility during shutdowns.
Amid January 2026’s budget tensions, US government shutdown risk remains high at 77-78%, impacting potential bipartisan funding progress and market sentiment.
With stalled negotiations, crypto markets enter ‘Extreme Fear,’ as histories show assets like BTC and ETH may face significant price downturns during shutoffs.
The US government’s potential shutdown, influenced by budget disagreements, sparks crypto market uncertainty on January 26, 2026.
This situation is crucial as it affects market stability and investor confidence, with Bitcoin dropping as a result.
77% Chance of Shutdown, Market Jitters Rise
US government negotiations face deadlock over the budget, increasing the risk of a shutdown. The discussion stems from disagreements over the Department of Homeland Security’s financial allocations.
No verifiable statements confirm progress in resolving the funding conflict. Notably, Polymarket indicates a 77-78% probability of a shutdown by January 31, heightening market anxiety.
Extreme Fear Index Indicates Investor Distress
The potential shutdown has resulted in crypto market sentiment shifting to ‘Extreme Fear’, as observed on the Crypto Fear and Greed Index. This indicates rising investor concern.
Bitcoin and Ethereum witnessed price drops of about 1-1.9%, emphasizing their vulnerability to political developments. These changes point to a broader financial and market instability.
Past Shutdowns Triggered Crypto Volatility
Previous government shutdowns in 2013, 2018-2019, and 2025 led to significant cryptocurrency price fluctuations. The 2025 shutdown saw a notable decline in Bitcoin and altcoin values by over 10% due to delayed data.
Historical data suggests if the shutdown occurs, crypto markets may experience heightened volatility. Experts anticipate possible short-term downturns but stress caution, as market resilience may vary. A prediction from a well-known platform mentioned, “Past US shutdowns have caused Bitcoin and Ethereum price drops ranging from 3% to over 15%, driven by economic data delays and risk-off behavior.” – Historical Shutdowns Impact
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