Bitcoin Drops Below $104,000 Amid Government Shutdown and Market Uncertainty
Bitcoin experienced a sharp decline on November 4, 2025, falling to approximately $103,000. The cryptocurrency dropped 3.6% within 24 hours, bringing significant pressure to the broader crypto market. This marks the lowest trading level for BTC since late June, breaking below critical technical support levels that traders had been monitoring closely.
Bitcoin Price Faces Technical Breakdown
The digital asset currently trades around $101,120, dropping from a previous close of $106,580. This represents a significant 5.12% decline in a single trading session. During this downturn, the broader cryptocurrency market shed roughly $100 billion in market capitalization. The selloff extended beyond Bitcoin, with Ethereum declining 6% and Solana experiencing losses exceeding 10%.
Technical analysts note that Bitcoin has broken below its 200-day moving average. This indicator traditionally serves as a critical support level for long-term investors. The breakdown suggests potential further downside if buyers fail to defend current price levels. In recent days, over $1.2 billion in leveraged positions were liquidated across the market.
Government Shutdown Creates Market Uncertainty
The U.S. government shutdown has reached its 35th day, tying the record for the longest federal closure. This political stalemate has amplified risk aversion across financial markets. Republicans and Democrats remain deadlocked over government funding, with particular disputes around healthcare subsidies. The extended shutdown affects federal employees, government services, and market confidence.
Financial markets generally respond negatively to political uncertainty. The shutdown coincides with broader concerns about monetary policy direction. Federal Reserve Chair Jerome Powell’s recent cautious tone about future rate cuts has dampened risk appetite. The combination of political gridlock and monetary policy uncertainty creates a challenging environment for risk assets like Bitcoin.
Bitcoin ETF Outflows Signal Weakening Demand
Bitcoin and Ethereum spot ETFs recorded combined outflows of $322 million over four consecutive days. This represents a significant shift in institutional sentiment. BlackRock’s IBIT fund specifically experienced its fourth consecutive day of withdrawals, marking the first such cycle since January. ETF flows often serve as a barometer for institutional investor appetite.
For the first time in seven months, institutions are buying less Bitcoin than miners produce daily. This imbalance between supply and demand puts downward pressure on prices. When miners create more Bitcoin than institutions purchase, the market must absorb the extra supply, increasing selling pressure. Long-term holders are taking profits, with daily distributions reaching approximately $2.5 billion.
Risk Correlation With Traditional Markets
Bitcoin’s correlation with the Nasdaq-100 index has climbed to 0.85. This high correlation means Bitcoin moves in tandem with technology stocks. When equity markets sell off due to economic concerns, Bitcoin typically follows. The asset class that once promised independence from traditional finance trades more like a leveraged tech stock.
Technology stocks faced pressure as investors recalibrated expectations around interest rates. The Federal Reserve indicated rates might remain elevated longer than previously anticipated. Higher rates reduce the appeal of speculative assets by making safer investments more attractive. Bitcoin, despite its scarcity narrative, remains vulnerable to these macro dynamics.
Historical Perspective Offers Hope
Despite current challenges, historical patterns suggest November could bring recovery. November historically ranks among the strongest months for Bitcoin bulls. Previous November periods have delivered substantial gains for patient investors. However, past performance never guarantees future results, particularly when facing unusual political circumstances.
The current selloff follows Bitcoin’s worst October performance in a decade. October 2025 saw a 4.5% decline, breaking the pattern of positive “Uptober” finishes. Traders who bought expecting seasonal strength faced disappointment. The question now becomes whether historical November strength can overcome current headwinds.
Conclusion
Bitcoin’s drop below $104,000 reflects multiple converging pressures on cryptocurrency markets. The ongoing government shutdown compounds concerns about Federal Reserve policy and institutional demand. ETF outflows signal weakening confidence among professional investors. Technical breakdowns below key support levels threaten further declines. However, seasonal trends and the potential resolution of political uncertainty could serve as catalysts for a market recovery.
