Global crypto markets are staging a notable recovery this week, with traders regaining confidence after fresh political and macroeconomic developments helped lift sentiment across risk assets.
The total cryptocurrency market capitalization rose by 4.03% in the past 24 hours, reaching $3.57 trillion, its highest level in nearly a month.
This renewed optimism follows encouraging progress in Washington, where U.S. lawmakers reached a preliminary agreement to end the record-breaking government shutdown that has stretched over 40 days. The Senate approved a procedural deal over the weekend, marking the first real step toward reopening federal agencies and paying more than 1.4 million affected workers.
The measure, which still requires approval in the House of Representatives, would extend government funding until January 30 while ensuring back pay for federal employees and continued support for critical programs like food assistance. Though not a permanent solution, the development has been welcomed by investors who had grown increasingly concerned about the prolonged political standoff and its economic repercussions.
Markets reacted positively to the breakthrough, with Wall Street futures, gold, and major cryptocurrencies all rising in tandem. Analysts say the sense of relief from a potential resolution is helping stabilize investor sentiment after weeks of uncertainty.
Bitcoin (BTC) climbed back above $105,900, gaining nearly 4% in the past 24 hours after briefly falling below the $100,000 mark last week. The recovery follows a period of intense liquidations that wiped out overleveraged positions during the recent downturn.
Data from Coinglass shows $345 million worth of crypto positions were liquidated over the past 24 hours, including $117 million in Bitcoin and $91.9 million in Ethereum. Interestingly, short traders bore the brunt of the losses, accounting for $260 million of total liquidations.
On the technical front, the daily MACD is showing early signs of a potential bullish crossover, while the RSI has rebounded from oversold levels, sitting near 45. These indicators suggest that downward momentum may be fading, and a short-term reversal could be underway.
Crypto analyst Michaël van de Poppe believes the current market phase mirrors late 2019 to early 2020, when altcoins began building momentum after an extended period of skepticism. He argues that Bitcoin dominance is entering a new declining phase, which historically signals the start of an altcoin-led market expansion.
“The market looks exactly like the stage when no one believed in altcoins,” van de Poppe wrote on X (formerly Twitter). “Bitcoin dominance has just seen its first drop, and I expect the second one to come in this quarter.”
He compared today’s setup to the pre-bull run conditions of the previous cycle, suggesting that the current disbelief among traders may precede the next broad uptrend across altcoins.
Van de Poppe also highlighted the Altcoins/BTC MACD chart, which he said is beginning to “curl upward” after years of flat performance. The analyst noted a bullish divergence forming on the indicator — the first of its kind in four years — which could signal an upcoming reversal in the altcoin-to-Bitcoin ratio.
He emphasized that such divergences often mark key turning points in multi-year market cycles. “The first green bar is forming, and it says one thing — the bull market hasn’t even started,” he explained.
While Bitcoin dominated headlines, several major altcoins outperformed the market in the latest session.
This broader move indicates that capital may be rotating from Bitcoin into alternative assets — a classic hallmark of early altcoin season phases.
The U.S. shutdown breakthrough is also shaping market dynamics beyond crypto. Economists note that the 40-day impasse had already slowed portions of the economy, particularly air travel, food assistance, and consumer spending among unpaid government employees.
With the Senate now moving forward on a resolution, investors are betting that the political gridlock will ease in time to prevent further damage. Senate Majority Leader John Thune described the deal as “a chance to get back to work” and said both parties were eager to address healthcare and social welfare concerns in a bipartisan way.
Although not all lawmakers are satisfied — with some Democrats calling the compromise “insufficient” — the progress has been enough to rekindle optimism across equity and crypto markets alike.
If the government funding deal clears the House this week, analysts expect a temporary boost to liquidity and investor sentiment — conditions that could further strengthen crypto’s recovery. Combined with a technical setup pointing to renewed momentum for altcoins, the next few weeks could determine whether this marks the beginning of a larger uptrend.
Van de Poppe’s outlook aligns with the broader view that Bitcoin’s dominance may have peaked, creating space for altcoins to outperform as capital rotates across the market. With total crypto capitalization already above $3.5 trillion, the stage may be set for the next expansion phase of the ongoing bull cycle.
As van de Poppe summed up: “We’re not near the end. The real move hasn’t even started yet.”
