Earlier today, I read a headline "Trump dump: Crypto liquidations hit $350M as Bitcoin drops below $69K" and that was really complex to assimilate. While I agree that the U.S. economy has a lot of influence on the crypto market, I never saw it from this perspective. Let's talk about the "Trump dump" in this post.
It is true that Bitcoin and the wider cryptocurrency market experienced nearly $350 million in liquidations recently, as Bitcoin briefly dropped below $69,000. The drop coincides with intense political tension surrounding the ongoing U.S. presidential election. There are speculations surrounding the U.S. presidential race between Donald Trump and Kamala Harris, with Trump viewed as more crypto-friendly due to his stance on deregulation and support for industry expansion.
Analysts and investors alike are closely watching the tight contest between former President Donald Trump and Vice President Kamala Harris, both of whom bring contrasting policies to the table with implications for cryptocurrency regulations.
Looking through the lens of history, significant political events, especially U.S. elections, have had noticeable effects on cryptocurrency markets. It is therefore believed that the outcome of this election could shape the future regulatory possibilities of the crypto industry, with both candidates holding divergent views on regulation and financial innovation.
Though many in the crypto community view Trump as more favorable to the industry, largely due to his previously expressed stance on deregulation and his openness to digital assets. Harris, on the other hand, aligns with regulatory approaches that may bring increased scrutiny to the crypto space, potentially impacting its growth and innovation.
Between October 28 and November 3, Bitcoin saw a wide price swings starting from $67,700, and reaching a high of almost $73,300 on Oct. 29 before dropping over the next few days to a low of $67,719 on Nov. 3. See chat below according to CoinGecko.
Source: CoinGecko
With the race tightening, market participants are reacting to the growing uncertainty. Some analysts believe that the ultimate outcome could set the tone for the U.S. government’s stance on cryptocurrency in the coming years, that this would have a great influence on the investor's sentiment and market stability.
Seeing Bitcoin drop below the crucial $69,000 level, with a significant number of leveraged positions across the crypto market were liquidated., one would wonder what the future holds for crypto. The sudden price decline activated stop-loss mechanisms, resulting in cascading sell-offs that totaled approximately $350 million according to CoinGlass analytics. This chain reaction is not unusual during periods of heightened volatility, especially as traders look to safeguard against deeper losses.
Responding, Ethereum, along with several other altcoins, also saw substantial liquidations. This broad impact highlights the interconnected nature of the crypto market, where movements in Bitcoin often ripple across other digital assets, intensifying losses and creating temporary market-wide shocks.
For the investor, it is time to approach the market with increased caution, and adjust their positions to mitigate further risk. For those already facing losses from liquidations, the immediate future hinges on the election results and whether a quick market rebound can be expected. Additionally, traders are closely monitoring potential support levels for Bitcoin and other cryptocurrencies, which, if broken, could lead to further declines.
The link between politics and crypto is worth the study and keen observation. Let's see what unfolds in the next few days as the US presidential election winds down.
Posted Using InLeo Alpha