$250M liquidates as Bitcoin slides 6.5% due to shift in Trump election odds
BTC flirted with its all-time highs, coming within just $194 of its March record at $73,794
Bitcoin’s wild price action continues to grab attention, and with the U.S. presidential elections just days away, things are heating up. The flagship cryptocurrency dropped by over 6.5% from its recent highs, slipping from $73,600 to around $69,200 on Nov. 1.
The market has long speculated that Bitcoin could be a "Trump hedge," given Donald Trump’s strong pro-crypto stance. Earlier this week, when Trump appeared to have a solid lead over Vice President Kamala Harris, BTC flirted with its all-time highs, coming within just $194 of its March record at $73,794. But with Trump’s betting odds shrinking, Bitcoin traders seemed to have hit the brakes.
HornHairs, a market analyst, sees a pattern here. He noted that derisking ahead of U.S. elections isn’t new, saying, “Derisking into the election 5-6 days before it takes place happened in both 2020 and 2016.” Importantly, in both cases, BTC never retested those pre-election lows again.
Market indicators suggest waning bullish cautiousness
Adding fuel to the sell-off, the Fear and Greed Index has been flashing “extreme greed” since Thursday, a red flag for overbought conditions. Sure enough, BTC’s plunge left over $88 million in futures bets in the red, as bullish traders watched their positions liquidate in quick succession.
Nearly 90% of futures bets were expecting BTC to push higher, with some traders eyeing $80,000 in the coming weeks. Instead, they were met with sharp liquidations, totalling over $250 million in bullish bets across the crypto market.
Another key focus is Bitcoin’s open interest, which came crashing down as BTC’s price dipped, pulling open interest down to just over $41 billion. High open interest combined with sudden liquidations often signals a tipping point, where aggressive positioning leads to swift market reversals.
A cascade of forced liquidations might be setting the stage for more volatility. As we approach the U.S. elections on November 5, expect more fireworks in the crypto space.
Mt. Gox transferred $35 million in Bitcoin to unmarked addresses. The move raises questions about potential progress in creditor compensation.
