Cryptocurrency

Bitcoin hits a 6-week high above $120,000, defying a government shutdown – Crypto News

Published

10 months ago

October 5, 2025

Dripp

Bitcoin has broken above the key $120,000 level for the first time since August.
The rally is fueled by renewed optimism about macroeconomic tailwinds.
BTC futures open interest has hit a record high of $32.6 billion.

The bulls are back in charge. Bitcoin has shattered the critical $120,000 resistance level, surging to a height not seen since mid-August as a powerful wave of optimism sweeps through the market.

The breakout, which follows a steady five-day climb, signals that traders are decisively positioning for a bullish final quarter of the year, undeterred by the political chaos unfolding in Washington.

This is a rally built on both renewed macroeconomic hope and a powerful internal market dynamic.

In the derivatives market, the conviction is palpable, with open interest in BTC futures soaring to a new record high of $32.6 billion, a clear sign that traders are placing big bets on further upside.

A short squeeze in the making?

Beneath the surface of this bullish momentum, a potentially explosive setup is taking shape.

On-chain analyst Skew has noted that even as open interest soars, a significant number of short positions are also piling up.

This creates the perfect conditions for a “short squeeze,” a violent upward price move that is triggered when a rising price forces a cascade of short-sellers to buy back their positions, adding even more fuel to the rally’s fire.

The shutdown factor: a crisis becomes a catalyst

Ironically, the political crisis in the United States may be a key catalyst for the market’s renewed optimism.

The ongoing government shutdown has injected a dose of profound uncertainty into the economic picture, a chaos that traders seem to believe will ultimately benefit risk assets like Bitcoin.

Treasury Secretary Scott Bessent warned on Thursday that the shutdown could have a real and damaging impact.

“We could see a hit to the GDP, a hit to growth and a hit to working America,” he told CNBC.

This economic weakness, coupled with the fact that the Federal Reserve will be deprived of a fresh jobs report, makes an interest rate cut at the end of this month all but a certainty.

The flip from skeptic to believer

The sheer strength of the recent advance has been enough to turn even the skeptics into believers.

Paul Howard, a senior director at the crypto trading firm Wincent, admitted he had been skeptical about a rebound earlier in the week, but the market’s relentless climb has changed his mind.

“With $BTC trading back at levels last seen in mid-July, the total market cap is once again above $4 trillion,” he noted.

We have seen a slow grind higher breaking above $115,000, indicating we are now more likely to stay above this level, with a CME gap to lock in the floor at $110,000.

His conclusion is now as bullish as the market’s momentum. “I believe we are now set to see a sustained rally above $120,000 in the coming weeks,” he added.

The quiet days of late September are over, and the battle for the next leg higher has begun.