The cryptocurrency market witnessed a dramatic flurry of activity following United States President Joe Biden’s announcement to withdraw from the 2024 presidential race. This decision had immediate repercussions on the trading dynamics, particularly for Bitcoin (BTC) and other major cryptocurrencies.
In the half-hour window from 5:30 pm to 6:00 pm UTC on July 21, the cryptocurrency market experienced significant volatility. Nearly $67 million worth of leveraged long positions were liquidated, primarily driven by a sharp 2.3% drop in Bitcoin’s price to $65,880. This abrupt decline was captured by the cryptocurrency markets platform CoinGlass.
Recovery and Short Position Liquidations
Despite the initial drop, Bitcoin quickly rebounded, climbing to a 24-hour high of $68,480. This recovery was not only swift but also impactful, as it led to the liquidation of $34 million worth of leveraged short positions. Markus Thielen, founder of cryptocurrency firm 10x Research, commented on the market dynamics, attributing the rebound to the lack of a credible Democratic candidate to contest Trump, which initially caused uncertainty but was followed by a bullish sentiment in the market.
Thielen also noted a significant buy order that coincided with Biden’s withdrawal, suggesting that some market participants might have used the political news as an opportunity to accumulate positions at lower prices.
Over a broader 12-hour timeframe, the market saw a total of $134.5 million in liquidations, encompassing both long and short positions. Specifically, $81.1 million in long positions and $53.4 million in short positions were wiped out from 10:00 am to 10:00 pm on the same day. Major cryptocurrencies such as Ether (ETH) and Solana (SOL) also experienced significant liquidations, with Ether seeing $31.1 million and Solana $8.6 million in liquidated positions.
Platforms Affected
The bulk of these liquidations occurred on prominent exchanges like Binance and OKX, where Binance accounted for $64.5 million and OKX for $44 million of the total liquidations. This highlights the global impact of U.S. political developments on international cryptocurrency markets.
As Vice President Kamala Harris is considered the likely replacement for Biden as the Democratic nominee, market participants are closely watching her stance on cryptocurrencies, which remains largely undefined. The political uncertainty surrounding the Democratic candidacy could continue to inject volatility into the crypto markets.
Joe Biden’s unexpected withdrawal from the presidential race underscores the interconnectedness of political events and financial markets, particularly the sensitive nature of cryptocurrency markets to geopolitical developments. As the political landscape evolves, the crypto markets are likely to remain a barometer of investor sentiment and political stability.
Featured image credit: Freepik
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