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The cryptocurrency market experienced a flurry of activity and significant volatility following United States President Joe Biden's unexpected withdrawal from the 2024 presidential election race. Within a brief 30-minute window on July 21, nearly $67 million in leveraged long positions were liquidated as Bitcoin's price plummeted by 2.3%, dropping to $65,880, as reported by CoinGlass.
However, the market swiftly rebounded, with Bitcoin recovering to a 24-hour high of $68,480. This sharp recovery led to a cascade of losses totaling $34 million for traders holding leveraged short positions.
Markus Thielen, founder of cryptocurrency firm 10x Research, attributed Bitcoin's rapid rebound to both market dynamics and political developments. "Biden was not credible to beat Trump so an alternative candidate could have limited Trump’s chances," Thielen remarked. "But there is no credible alternative… hence BTC pump."
Additionally, a substantial buy order injected further momentum into Bitcoin's price recovery during this period.
Wide Impact Across Major Cryptocurrencies
The volatility extended beyond Bitcoin, impacting other major cryptocurrencies over a broader 12-hour timeframe. During the period from 10:00 am to 10:00 pm on July 21, liquidations amounted to $81.1 million in long positions and $53.4 million in short positions across various cryptocurrencies.
Specifically, Bitcoin saw $43.8 million in liquidated positions, Ethereum (ETH) experienced $31.1 million, and Solana (SOL) incurred $8.6 million in losses. This combined total of $134.5 million in liquidations marked the highest within a 12-hour window since July 8.
Exchange Activity and Market Response
The liquidations were concentrated primarily on major cryptocurrency exchanges, with Binance and OKX recording the largest amounts at $64.5 million and $44 million, respectively.
Looking ahead, speculation centers on US Vice President Kamala Harris as a likely replacement for Biden as the Democratic Party nominee for president, adding another layer of uncertainty to the political landscape and its potential impact on financial markets.
At the time of publication, Bitcoin is trading at $67,850, reflecting a modest 0.55% increase over the last 24 hours amidst ongoing market adjustments and reactions to recent events.
The cryptocurrency market's swift reaction to political news underscores its sensitivity to external events and highlights the significant role of leveraged positions in amplifying market volatility. As political developments continue to unfold, market participants remain vigilant, navigating both short-term fluctuations and broader trends in digital asset prices.
