K33: The Golden Week overlapping with a US government shutdown may lead to market illiquidity, exposing the market to the risk of abnormal price fluctuations

BlockBeats News, October 1st, Cryptocurrency market research firm K33 Research stated in its latest report that China has begun its National Day Golden Week holiday, while Washington has entered a partial government shutdown. Although the light liquidity in the Asian market usually signals a subdued start to the month for the world's largest cryptocurrency, the U.S. government shutdown has led to delays in economic data, potentially disrupting this pattern and causing market volatility.

K33 data shows that historically, the first week of October usually sees a flat or negative return (although the 2021 bull market is a significant exception), and volatility during this period often compresses to local lows. Analysts point out that the Golden Week holiday can only partially explain the phenomenon of thin trading. In fact, the period from August to mid-October has traditionally been the most stable period of price volatility throughout the year.

However, the uncertain macro backdrop is more complex—the U.S. federal government entered a partial shutdown at 00:01 Eastern Time on Wednesday, with many non-essential federal services now suspended, staff on unpaid leave, and key data on employment and inflation delayed. Lunde warned that combined with the potential light Asian fund flows, the order book depth may worsen, exposing traders to the risk of "abnormal price fluctuations" during the overlapping trading period in early October.

Director of K33 Research, Vetle Lunde, stated that Bitcoin is still in a consolidation phase, CME open interest has fallen to a five-month low, funding rates are hovering below neutral, and options traders still prefer bearish positions. He warned that the high leverage in perpetual contracts makes the market vulnerable to a surge in volatility when positions are liquidated.