Bitcoin (BTC) has plunged and dropped under $70,000 in the past 24 hours. Bitcoin has fallen to a low point of $68,830 Friday after reaching a high of $73,620 on Tuesday, declining about 5.7 percent. Analysts cite several reasons for the drop:
Prediction markets have helped tighten a race between former President Donald Trump and Vice President Kamala Harris, with some describing Bitcoin as a ‘Trump hedge’. Trump suggested the creation of a ‘strategic Bitcoin reserve’ in the U.S, promising to hold government Bitcoin and encourage the country to become a ‘crypto capital.’
Bitcoin Prices Near Highs
Bitcoin prices have been influenced by this stance, rising to near record highs this week as Trump’s lead widened. They instead start to become more cautious about his lead. In addition, historical trends are important as past elections also led to such pre election risk reduction in financial markets.
In what looks to be a pre-election pullback, Crypto analyst HornHairs has called for traders to refrain from selling during this drop. However, like the stock market, BTC movement has further aligned with stock market behavior, as the S&P 500 recently hit lows not seen since October 9.
Most major tech reported strong earnings but stocks like Apple, Meta, Amazon continued to come under sell offs even as markets became more cautious. Leading up to the election, broader market de-risking has increased volatility, said analysts at The Kobeissi Letter.
Technical factors also determined the behavior of traders in the S&P 500, after its recent loss of a three-month trendline pointed to perhaps a short term selloff. A key BTC level could be around $63,000, according to crypto trader Marco Johanning. Further, a large loss in leveraged positions has resulted in a strong pressure on the BTC price.
According to on chain data, BTC, ETH and SOL futures open interest tops $50 billion for the first time while open interest slumps by $2.1 billion, a huge leverage flush out. Since October, there have been over 93,800 trades liquidated for a total of $286.73 million in total liquidations, with BTC long positions representing $81.38 million, the biggest since October.
