The cryptocurrency market breathed a sigh of relief during trading on February 4, following US President Donald Trump's signing of a funding bill that ended a partial government shutdown, a move that eased the political tension that had been weighing on markets in recent days.
Following this development, Bitcoin's price rebounded, trading near $76,000 during the Asian session, after experiencing sharp fluctuations at the end of the week. The largest cryptocurrency had plummeted to around $73,100 on February 3, its lowest level since before Trump's 2024 election victory.
In the broader market, the violent sell-off appeared to have temporarily subsided, with the total market capitalization of cryptocurrencies stabilizing near $2.7 trillion, suggesting that selling pressures were easing in the near term.
The previous decline was driven by thin liquidity over the weekend, forced sell-offs, and heightened investor caution amid political and economic uncertainty. Ethereum and several other major altcoins also suffered significant losses, with Ethereum falling towards the $2,200 level before recovering some of its losses later.
As prices improved, trading activity increased, indicating that traders were returning to the market to seize short-term opportunities. However, prices remain below their recent highs, and investor confidence remains fragile, amid anticipation of upcoming pivotal moments.
