• Bitcoin trades near $104,000 on Wednesday after being rejected at a key resistance level the previous day.
• The likely end of the US government shutdown and return of key economic data could spark short-term BTC volatility.
• US-listed spot Bitcoin ETFs saw a $523.98 million inflow on Tuesday, reflecting renewed institutional demand.

Bitcoin (BTC) price steadies around $104,000 at the time of writing on Wednesday after being rejected from a key resistance level, suggesting a consolidation may continue in the near term. The likely end of the US government shutdown and the return of key economic data could bring fresh volatility to the largest cryptocurrency by market capitalization. Meanwhile, US-listed spot Bitcoin Exchange Traded Funds (ETFs) saw a $523.98 million inflow on Tuesday, signaling improving institutional appetite.

Bitcoin could experience volatility if the US government resumes operations 

With the US government shutdown nearing its end, the return of key economic data could trigger a repricing of Federal Reserve (Fed) expectations and fuel short-term volatility in Bitcoin. However, in the absence of a clear and sustained macro catalyst, current market conditions suggest that BTC is likely to remain sideways in the near term.

A K33 Research report highlighted that the bill still requires approval from the House of Representatives and President Trump’s signature before the shutdown can officially end.

The analyst continued: "A resolution would immediately ease liquidity pressures and allow frozen federal operations to resume. Key agencies, such as the Bureau of Labor Statistics and the Bureau of Economic Analysis, are expected to resume publishing official data once funding is restored. The market will be closely watching for the release of delayed employment, inflation, and other macroeconomic indicators, though agencies may stagger or partially release this data due to the backlog."

Additionally, the QCP Capital noted that while the bill to end the US government shutdown moves to the House for approval, its passage would only offer a short-term reprieve, averting holiday disruptions but leaving the risk of another fiscal standoff early next year. 

“It is a textbook case of ‘kick-the-can’ policymaking that removes immediate tail risks but doesn’t resolve the structural issue. Markets will stay headline-sensitive to procedural snags or delays in the House vote,” said QCP’s analyst.

Bitcoin’s institutional demand returns

Institutional demand for Bitcoin shows some signs of recovery. According to SoSoValue data, US-listed spot Bitcoin ETFs recorded inflows of $523.98 million on Tuesday, after a mild $1.15 million inflow the previous day, ending the recent streak of withdrawals totaling $1.22 billion the previous week. If this trend of inflows intensifies, it could provide the momentum needed for Bitcoin to extend its ongoing price recovery.

Bitcoin Price Forecast: BTC faces correction from key resistance level

Bitcoin price rose slightly and retested the key resistance at $106,453 —the 38.2% Fibonacci retracement (drawn from the April 7 low of $74,508 to the all-time high of $126,299 set on October 6, at $100,353) — on Monday and declined 2.78% the next day. At the time of writing on Wednesday, BTC recovers slightly, trading above $104,700.

If BTC continues its recovery and closes above the 38.2% Fibonacci retracement at $106,453 on a daily basis, it could extend the rally toward the 50-day Exponential Moving Average (EMA) at $109,755.

The Relative Strength Index (RSI) reads 44, approaching the neutral 50 level and suggesting fading bearish momentum. For the recovery rally to be sustained, the RSI must move above the neutral level. Additionally, the Moving Average Convergence Divergence (MACD) lines are converging, with decreasing red histogram bars below the neutral level and suggesting an impending bullish crossover.

On the other hand, if BTC continues its correction, it could extend the decline toward the key support at $100,353.