Bitcoin traders stall as US shutdown, Fed policy shift raises fear

The key takeaways

• Bitcoin data shows professional traders avoid risk by paying more to be protected against price drops.

• Bitcoin has remained stagnant as investors continue to prefer safe traditional havens.

BitcoinBTC( ) surged 1.5% after a second test of $86,000 on Sunday, as traders assess the risk of an imminent US government shutdown. The week is filled with multiple catalysts that are high stakes. These include earnings from tech giants around the world and Wednesday’s US Federal Reserve monetary policy announcement.

Although gold hitting record highsBitcoin traders continue to be cautious. Indicators of derivatives suggest that traders remain cautious about future gains. There is a low demand for bullish leveraged positions, and the odds are higher than usual in professional markets.

On Monday, the annualized BTC Futures Premium (basis) was 5%. It is difficult to justify the higher settlement times of these derivatives. This indicator typically jumps over 10% when traders become bullish. Inversely, periods of bearishness can make the rate turn negative. The market has been in a neutral-to bearish mood for the past 2 weeks.

On Monday, BTC’s delta skew increased to 12%. It means that traders are reluctant to expose themselves to downside risks. This indicator fluctuates normally between -6 and +6 in a neutral market. This was the last time that the skew had reached this level on December 1, as Bitcoin plunged from $91,500 in just hours to $83,900.

Gold surges in the face of US dollar debasement concerns, while Bitcoin is lagging behind

Bitcoins downward trend cannot be attributed to any other cause. US fiscal standoff seems counterintuitive, especially as the S&P 500 climbed 0.6% on Monday. Gold surged above $5,100 in the past for the very first time. Analysts have begun to question whether this rally is a sign of a broader trend. “debasement trade” The rate of growth is increasing. Although the US dollar is losing its value in comparison to scarce assets, there is currently an overall lack of confidence that does not translate into gains for Bitcoin.

After the Federal Reserve Bank of New York warned of a possible financial crisis, investors have been more risk-averse. rescue of the Japanese yen—a move not seen since 1998. Other major fiat currency have performed better than the US Dollar over the past 12 months, increasing the cost of US imports and pushing inflation higher. If traders perceive the Fed’s intervention as desperate, they may view it that way.

As traders searched for protection, on Monday the US Dollar Strength Index (DXY), dropped below 97. This was the first drop in over four months. 

Investors are bracing themselves for higher US inflation despite the fact that US Treasury 5-year yields have surpassed those in Europe and Japan, at 3,8%. The US is likely to adopt a more accommodative monetary policy as the mandate of Fed Chairman Jerome Powell ends in April.

Donald Trump of the US has said that Powell’s successor should focus on cutting Fed funds rates. This would allow the US Treasury to breathe easier by cutting interest costs. Although a more expansive monetary policies typically support the stock markets, they do not create an immediate and direct incentive for Bitcoin investments.

Related: Crypto funds see $1.7B outflows, biggest since November 2025

Investors may have less motivation to switch to alternative assets if corporate earnings surprise on the positive side this week. Bitcoin’s ability to return to the $93,000 mark depends on traders regaining confidence. The recovery may take longer than anticipated, as the macroeconomic changes and corporate earnings are the main topics of discussion this week.