Cryptocurrency market trends remain sensitive to U.S. political risk: Details

Bitcoin prices fell to around $72,800 yesterday as the controversy over the passage of a temporary financing package escalated in Washington, before rising again after the House of Representatives approved the project today (February 4, 2026).

The approval eases concerns about a partial government shutdown.

This rapid shift highlights how closely digital currency market movements are linked to U.S. political risks, even in the absence of any news directly related to blockchain.

During the U.S. trading session, the decline coincided with headlines about the closeness of the vote, prompting traders to generally reduce exposure to riskier assets.

Santiment data shows that the drop led to the liquidation of approximately $30 million in the decentralized finance sector and was accompanied by simultaneous declines in the S&P 500 Index and even gold, indicating that the motivation was risk aversion due to political uncertainty rather than factors specific to the digital currency market.

Attention is focused on the fate of an estimated $1.2 trillion funding package designed to keep most federal agencies operating through Sept. 30.

Failure to do so would result in partial shutdowns, delaying important economic data and adding to market pressures at a time of cautious market sentiment.

Despite divisions within the Republican Party and objections from one of its members over the project’s involvement in foreign aid, the project ultimately passed, quickly affecting markets. Bitcoin prices rose more than 5% in a matter of hours, with the S&P 500 also recovering.

you seesaint“This rapid reaction supports the idea that the selling wave was driven primarily by political concerns rather than a fundamental reassessment of Bitcoin’s value.

However, Bitcoin remains under broader pressure.

According to CoinGecko data, Bitcoin prices fell by about 14% in a week and by about 17% in a month.

Analysis published by “Galaxy Digital” also showed a decline in some network indicators, with an estimated 46% of the circulating supply being “underwater”, meaning it ended up moving at a higher price level, which could increase the likelihood of selling pressure. Weak accumulation by major holders was also noted.

Additionally, reports on February 3 that Iran was seeking to change the shape of its nuclear negotiations with the United States caused another downturn, sending prices below $75,000 and leading to at least $20 million in derivatives liquidations.

Against this backdrop, some analysts believe that the bottom of the cycle may fall in the $44,000 to $54,000 range, while the most important question remains:

Will the immediate decline in political risk be enough to reverse the negative trend, or will Bitcoin remain vulnerable to a test of deeper support levels?

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