Crypto Rallies as U.S. Shutdown Looms, Japan Yields Spike

Crypto Market Surges Past $2.37 Trillion Amid Global Economic Uncertainty and Low Volatility

  • Cryptocurrencies held strong despite a potential U.S. government shutdown and turbulence in Japan’s bond market.
  • Bitcoin, ether, solana, and Dogecoin saw significant gains, with total crypto market capitalization surpassing $2.37 trillion.
  • Traders are anticipating that central banks may loosen financial conditions due to delayed U.S. job reports and rising Japanese yields.
  • Analysts report low volatility across digital assets and traditional markets, suggesting a stable trading environment.
  • Market participants are watching to see if the current momentum in crypto can be sustained as macroeconomic uncertainties continue.

Digital assets showed resilience this week even as a possible U.S. government shutdown and growing pressure in Japan’s bond market weighed on global markets. Traders responded by positioning for easier liquidity worldwide.

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Major cryptocurrencies posted gains, with Bitcoin trading near $118,700 after climbing more than 3% in 24 hours. Ether increased 5.6% to $4,374, Solana added nearly 7% to reach $223, and Dogecoin jumped almost 9% to $0.25. XRP held steady at $2.97. The rally lifted the market capitalization of all digital assets above $2.37 trillion, according to CoinMarketCap data.

The gains came as Friday’s U.S. payrolls report faced possible delays and Japanese government bond yields reached their highest levels since 2008. These events have led some traders to expect more supportive measures from central banks. “The U.S. government shutdown and weak employment numbers from ADP have impacted markets this past week. Traders believe that these catalysts could be making a case for the Fed to further stimulate the economy and cut rates through the rest of the year, which could boost stocks and cryptocurrencies,” said Jeff Mei, COO at BTSE.

Shutdowns that slow economic data and reduce fiscal transparency can prompt central banks to proceed more cautiously. Meanwhile, rising yields in Japan suggest policy adjustments that could affect global funding conditions.

Analysts indicate that volatility—how much prices change over time—is staying low for both cryptocurrencies and traditional assets. “The major theme this quarter is with lower implied volatilities, evident across equities, rates, FX, and even BTC. This has been driven by a collapse in realized volatilities thanks to an accommodative Fed, stabilizing global GDP, lack of significant tariff-passthroughs on CPI readings, and a flattening of geopolitics and tariff surprises,” said Augustine Fan, Head of Insights at SignalPlus.

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Market participants continue to monitor if cryptocurrencies can maintain their independence from shifts in the broader economy, or if renewed challenges from the U.S. and Japan will affect the current trend.

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