Bitcoin (BTC) crashed below $69,000 on Sunday, resulting in significant market liquidations. Interestingly, analysts have also noted a correlation between this decline and a decline in US Republican presidential candidate Donald Trump’s chances of winning ahead of the November 5 general election.
Bitcoin Price Drop Causes $232.6 Million in Liquidations
In recent days, Bitcoin has witnessed a significant price recorrection following a prolonged price surge in October during which it gained by 20%. The price of the leading cryptocurrency initially fell from above $73,000 on Friday finding support around the $69,000 region.
After a brief period of sideways movement, BTC saw another significant decline on Sunday, reaching a local low of $67,960. Amid this price drop, crypto analyst Ali Martinez noted that the 104,787 trading positions were liquidated, resulting in a loss of $232.6 million.
Data shared by Martinez showed that long traders accounted for the majority of these figures with $198.6 million in liquidations, while only $34 million in short positions were closed. This development means that more traders had expected a recovery from the crypto market leader after the initial price drop on Friday.
At the time of writing, Bitcoin has returned above $68,000, with little indication of the next price move. If the current downtrend continues, the leading cryptocurrency could fall as low as $55,000, in line with a range-bound move that has lasted for the past eight months.
Alternatively, Bitcoin could see a price recovery that returns to levels within its all-time high of $73,750 as bullish sentiments remain high amid increased ETF inflows, a fast-approaching US election and a expected Fed rate cut of 25 basis points.
Is a Potential Trump Loss a Threat to Bitcoin?
So far, Bitcoin’s decline on Sunday has been linked to a decline in US presidential candidate and crypto activist Donald Trump’s chances of winning. According to data from PolymarketTrump’s chances of emerging victorious in the November 5 presidential election fell 4.3% after his opponent, Democratic candidate and US Vice President Kamala Harris, became the favorite to win in Pennsylvania.
Although the pro-crypto Donald Trump remains the frontrunner to become president with a rate of 53.8% to Harris’s 46.1%. Recent Bitcoin price reactions have shown that a potential Republican loss could cause a significant price drop for the crypto market leader. Although, historical price data indicates that such a downturn would likely be temporary, as Bitcoin has consistently been on a bullish trajectory after the US elections, regardless of the outcome.
At the time of writing, BTC is now trading at $68,471, reflecting a price loss of 1.38% in the last 24 hours. Meanwhile, the asset’s daily trading volume has fallen by 40.54% and is valued at $24.40 billion.
Featured image from Yahoo Finance, chart from Tradingview