Bitcoin Recovers Above $117,000: Why is BTC Surging Today?

Bitcoin has recovered from the latest downtrend amid the recent political developments in the United States.

Notably, Bitcoin bounced back strongly after more than a week of heavy losses. The leading cryptocurrency dropped from $117,968 on Sept. 18 and kept falling until it broke below $110,000, hitting a low of $108,676 on Friday, Sept. 26. This drop capped one of Bitcoin’s roughest stretches in recent months.

However, a rebound emerged on Sept. 28, triggering a fast recovery. Bitcoin pushed through $110,000, $111,000, and $112,000 almost in a single move. It hit resistance at $114,000 on Sept. 30, but today it pushed higher, reclaiming the $117,000 level and trading at $117,180 at press time. From last Friday’s bottom, Bitcoin has gained 7.83%.

For context, the deadlock came after Republicans and Democrats failed to come to a deal on funding to keep federal operations running until late November. Republicans, who hold the majority Congress, were unable to secure the Senate votes needed to push their bill forward.

Notably, the major points were disagreements over Affordable Care Act funding and the extension of tax credits for health insurance. The impasse has forced government services to shut down and has paused federal employee salaries.

Bitcoin in a Decisive Position

Expectedly, the political drama has also benefited gold. Specifically, the precious metal has now posted five straight days of gains, setting a new all-time high of $3,895 before easing slightly to $3,875 today. Gold usually thrives during shutdowns, while Bitcoin’s track record has been mixed.

During the last prolonged shutdown from December 2018 to January 2019, Bitcoin initially climbed but then slipped as the standoff dragged on, falling from $3,843 to $3,511 by the end. This history leaves questions about whether Bitcoin can hold on to its latest gains if the current shutdown stretches out.

Meanwhile, market analyst Ted Pillows revealed today that at its current position, Bitcoin sits between two major liquidity zones. He pointed out that one cluster sits between $107,000 and $108,000, where about $8 billion in long positions could face liquidation.

The other cluster sits higher, between $118,000 and $119,000, with around $7 billion in short positions at risk. Now, it remains to be seen whether buyers will push Bitcoin higher into the short liquidations, or sellers will drag it back down into the longs.