Key Points
- Bitcoin market Futures experienced $324 million in long liquidations due to a feud between Trump and Musk.
- Binance recorded an inflow of 2.5k BTC, contributing to a total exchange inflow of 32k BTC.
The Bitcoin market recently witnessed a significant drop, plunging from a high of $105.9k to a low of $100k. This decline was largely attributed to political tensions in the United States, as a feud between President Trump and Elon Musk escalated.
Impact on Bitcoin’s Market
The political dispute severely affected Bitcoin’s market conditions. According to CryptoQuant analyst Axel Adler, the public disagreement between the two leaders resulted in Bitcoin’s Futures market experiencing $324 million in long positions liquidation. As the market fell to $100k, investors who had bet on the market to rise were liquidated.
Furthermore, Bitcoin’s Open Interest dropped from $34.8 billion to $34.2 billion, a $600 million decline. This significant drop implies that investors withdrew a substantial amount of capital from the Futures market as the political climate intensified. The Funding Rate also flipped negative for the first time in the past 30 days, indicating that shorts are currently dominating the market.
Increased Flow into Exchanges
In addition to the Futures market, this event triggered massive inflows into exchanges. More than 32kBTC were deposited into all exchanges, with Binance seeing an influx of 2.5k BTC in spot exchange, suggesting significant sell-offs. This trend indicates that many holders and investors panic sold, fearing further market decline.
Despite the negative impact of the Musk-Trump spat on Bitcoin, the market suggests that the downside was short-lived. Bitcoin’s exchange netflow flipped negative after rising to a positive over the past day, indicating that after BTC dipped to $100k, buyers seized the opportunity to buy the dip. This new demand, if sustained, could set Bitcoin on course to reclaim the $105.9k resistance level.
However, the recent dip has significantly affected Bitcoin’s 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. The nearest support for STH’s realized price is now at $97.5k.
