Crypto Chaos Inevitable as Biden Steps Back: $174 Million Liquidated in 24-Hour Market Turmoil
In Brief
The cryptocurrency landscape faced a tumultuous wave of instability triggered by the ongoing US presidential election, with a staggering $174 million liquidated in a mere 24 hours.
The crypto market went through intense turbulence when the US presidential election took an unanticipated turn. This sudden shift led to a dramatic spike in liquidations, with around $174 million vanishing in just one day, underscoring how sensitive digital currencies are to political shifts and their tight interconnection with global finance.
Photo: CoinGlass
Market's Response to Biden's Exit
The surprising announcement by President Joe Biden regarding his withdrawal from the 2024 presidential race ignited a wave of volatility in the market. This news shook the crypto landscape, resulting in a quick and powerful market reaction. According to data from CoinGlass, almost $67 million in leveraged long positions were liquidated within the frantic first 30 minutes following the announcement.
The leading cryptocurrency, Bitcoin, bore the brunt of this immediate impact. Its value plummeted abruptly by 2.3%, dropping from $67,713 to $65,880, catching many traders off guard, especially those holding leveraged positions.
Photo: CoinGecko
However, the market demonstrated its characteristic volatility and resilience, bouncing back swiftly. Shortly after the initial dip, Bitcoin's price surged to a high of $68,480 within 24 hours. This rapid recovery led to further fluctuations, resulting in approximately $34 million in leveraged short positions being liquidated as the price climbed.
Broader Crypto Market Impact
The implications of this political shake-up extended beyond just Bitcoin. On July 21, the entire cryptocurrency market registered liquidations totaling $134.5 million within a 12-hour span, comprising $81.1 million from long positions and $53.4 million from short positions.
Ethereum (ETH), the second-largest cryptocurrency, saw liquidations worth $31.1 million, while another notable player, Solana (SOL), faced $8.6 million in liquidations. Such figures illustrate the widespread impact of Biden's announcement on the entire crypto ecosystem.
Photo: CoinGlass
Photo: CoinGlass
The bulk of these liquidations occurred on major cryptocurrency exchanges, with Binance and OKX processing $64.5 million and $44 million, respectively. This concentration of activity on leading platforms highlights their critical role in managing market fluctuations and absorbing shocks during periods of high volatility.
Photo: CoinGlass
Political Ramifications and Crypto Market Sentiment
The market's reaction to Biden’s exit sheds light on the complex ties between political events and cryptocurrency valuations. Many traders perceive certain political outcomes as potentially beneficial for the crypto sector, which in turn influences their trading strategies and overall market sentiment.
The insights from Markus Thielen, founder of the cryptocurrency research firm 10x Research, offered an intriguing perspective. He suggested that Biden’s image as a pro-crypto candidate could mean that his withdrawal might inadvertently boost Donald Trump’s chances of securing the presidency. Trump's recent claims about wanting to keep Bitcoin mining operations within the US are interpreted as somewhat favorable for the industry. Currently, Vice President Kamala Harris is recognized as the Democratic nominee for the upcoming presidential election, yet the political landscape remains uncertain. Investors and analysts alike are closely monitoring this evolving situation to gauge its potential effects on the market. \"My fellow Democrats, I have decided to forgo the nomination and dedicate my efforts to serving as President for the remainder of my term. My first crucial decision as the nominee in 2020 was to select Kamala Harris as my Vice President, and it has proven to be...\"
Significant Events and Forecasts for the Crypto Market
upcoming Bitcoin 2024 Conference scheduled for July 27 in Nashville. Former President Donald Trump is slated to address the conference, and his statements could sway Bitcoin's trajectory.
Experts are drawing parallels to Elon Musk's 2021 remarks at a Bitcoin event, which initially triggered a market downturn followed by a substantial recovery. Speculation is rife that Trump’s speech could similarly catalyze Bitcoin to reach new all-time highs. Another crucial development on the horizon is the Ethereum ETF, which is set to begin trading on July 23. Notable figures in the industry, like Bitwise's Chief Investment Officer Matt Hougan, are optimistic about the ETF's potential to elevate Ethereum's value, with some projections suggesting it could exceed $5,000 by the end of 2024. Based on the recent shift in the Fear and Greed Index from a state of high fear to greed, it appears Bitcoin could be gearing up for significant growth. Current price predictions from credible analysts, along with the shift in market sentiment, are instilling cautious optimism among traders.
Nonetheless, it's crucial to recognize that the crypto market remains highly volatile and vulnerable to sudden swings influenced by various factors. The recent wave of liquidations serves as a stark reminder of the inherent risks associated with trading cryptocurrencies using high leverage. The dramatic surge in cryptocurrency liquidations, correlated with the tumult surrounding the US election, highlights the market’s sensitivity to geopolitical occurrences. As the cryptocurrency landscape continues to evolve and increasingly intertwine with traditional financial markets, the connections between political events and market fluctuations are likely to intensify.
For crypto traders and investors, staying vigilant regarding technological advancements within the industry as well as broader geopolitical shifts is essential, as these elements could significantly impact market dynamics. The cryptocurrency market is poised for profound structural changes and price volatility in the coming weeks and months. As always, it remains critical for participants in the cryptocurrency arena to approach trading and investing with caution, conducting thorough research and carefully weighing their risk exposure. The recent market turbulence underscores the importance of risk management strategies in navigating the unpredictable landscape of cryptocurrency trading. Please bear in mind that the information provided on this page is not intended and should not be perceived as legal, tax, investment, financial, or any other form of advice. Only invest what you can afford to lose, and seek independent financial counsel if you have any uncertainties. For additional details, we recommend checking the terms and conditions as well as the support resources offered by the issuer or advertiser. At MetaversePost, we strive for accurate, unbiased reporting; however, market conditions can change swiftly and without warning.
Photo: CoinGecko
Victoria writes on a diverse range of technology topics, including Web 3.0, AI, and cryptocurrencies. Her extensive background enables her to craft insightful articles for a broader audience.
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