Bitcoin Price Plunges Amid Political Uncertainty and Market Liquidations

Bitcoin price swung to $66,000 before rebounding to the upper end of its daily range. Analysts are dissecting the reasons behind BTC's current volatility.

Source: tarifemevzuati.com

Bitcoin's drop to an intra day low of $66,569 on July 22, just before the anticipated launch of spot Ethereum ETFs in the US, raised eyebrows. The bullish momentum that drove BTC above $68,000 is now in question, with traders striving for sustained daily closes above this mark. Beyond speculation on US President Joe Biden's potential withdrawal from the November race influencing Bitcoin's price, the cryptocurrency faces pressure from a strengthening US dollar. Here's an examination of the factors impacting Bitcoin's price today.

Bitcoin Bulls Take Profits Amid Political Uncertainty

Biden’s decision to withdraw and endorse Vice President Kamala Harris for the presidency introduced some volatility to the markets. While Republican candidate Donald Trump has embraced a pro-Bitcoin stance in his election platform, Harris’s position on cryptocurrencies remains uncertain.

Market intelligence firm Sentiment noted an immediate minor panic drop in crypto prices in response to the news of Biden stepping aside, similar to reactions observed previously with Trump related news. According to Markus Thielen, founder of 10x Research, today's Bitcoin downturn suggests traders are likely taking profits ahead of Trump's upcoming speech at the Bitcoin Conference on Saturday, July 27. Thielen cautioned that profiting from or shorting Bitcoin before Trump’s Nashville speech could prove costly, as outlined in his newsletter on July 22. Additionally, Thielen highlighted Bitcoin's struggle against strong resistance at its 2021 all-time high of $69,000, speculating that a decisive close above this level could potentially trigger a parabolic rise in BTC's price.

Bitcoin Long Liquidations Increase

A significant movement in the Bitcoin futures market appears to have triggered BTC's recent price decline. The timing of these long liquidations coincided with a sharp drop in the cryptocurrency's value. Coinglass data indicates that over the past 12 hours, more than $7.16 million worth of BTC long positions have been liquidated. Across the entire crypto market, total liquidations amounted to $41 million, with $23.3 million specifically from long positions during this period. Long liquidations occur when traders who were bullish on an asset and held long positions incur losses due to a sudden price drop. 

Besides, there was a notable spike in Bitcoin transferred to exchanges on July 22. Increased inflows to exchange wallets typically indicate higher selling pressure in the market. The uptick in BTC being moved to known exchange addresses suggests that investors are capitalizing on current prices by taking profits, contributing to the current volatility in Bitcoin's price.

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.