Bitcoin long-liquidation hits $324 million Amid Trump-Musk fallout

Bitcoin

Bitcoin long-liquidation hits $324 million Amid Trump-Musk fallout

Over the past day, Bitcoin [BTC] saw a sharp drop, hitting a low of $100k from a high of $105.9k.

This drop was largely driven by political issues in the United States, as President Trump and Elon Musk escalated their feud.

This political debate has massively impacted Bitcoins market conditions.

According to CryptoQuant analyst Axel Adler, the public feud between the two leaders saw Bitcoins Futures market experience $324 million in long positions liquidation.

As the market dropped to $100k, investors who were betting on the market to rise were liquidated, with even James Wynn getting liquidated thrice.

Source: CryptoQuant

Looking further into Futures markets, Bitcoins Open Interest dropped from $34.8 billion to $34.2 billion, a $600 million decline.

Such a massive drip suggests that investors pulled a significant amount of capital into the Futures market as the political temperature heated up further.

Source: CryptoQuant

We can see the same pattern with the Funding Rate, which flipped negative for the first time over the past 30 days.

This suggests that investors going long have almost been displaced by shorts, which are currently dominating the market. A short dominance implies that traders are bearish and expect prices to drop again.

Source: CryptoQuant

Besides the Futures market, the said occurrence resulted in massive flows into exchanges.

As such, more than 32kBTC were deposited into all exchanges with Binance seeing 2.5k BTC in spot exchange indicating massive sell-offs. This implies that most holders and investors panic sold, fearing further downside.

Whats next for BTC？

Although the Musk-Trump spat had a negative impact on Bitcoin. It all disappeared as first as it appeared. The market suggests that the downside was short-lived, and the king coin was eyeing higher levels.

Source: CryptoQuant

Looking further, Bitcoins exchange netflow flipped negative after rising to a positive over the past day. This implies that after BTC dipped to $100k, buyers took the opportunity to buy the dip.

Thus, exchange withdrawals have outpaced deposits. This new demand, if held, sets Bitcoin to reclaim the $105.9k resistance level.

However, the recent dip has had a significant impact on Bitcoins short-term holders as it dropped below $104,654k, which is the maximum price for the $101k to $104k cluster.

At this level, there are over 1.37 million addresses with 707k BTC. Now, the nearest support for STHs realized price is $97.5k.