Crypto Market Experiences Dramatic Sell-Off Amidst Political Developments

Crypto Market Faces Sudden Sell-Off

The cryptocurrency market witnessed a dramatic sell-off on Monday, with a staggering $90 million in positions liquidated within a single hour. Bitcoin saw a decline of over 1 percent, while Ethereum dropped nearly 2 percent as investors opted to take profits. Major altcoins, including Solana (SOL), BNB, XRP, and Cardano (ADA), experienced losses in the range of 2 to 3 percent following a significant price rally just 24 hours prior. Additionally, popular meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) suffered a 6 percent drop within an hour. Despite the crypto market’s apparent bullish momentum, spurred by Donald Trump’s recent victory in the US presidential election—widely viewed as favorable for Bitcoin—indicators suggest a potential downturn.

Will Bitcoin and Altcoins Continue to Decline?

Data from Coinglass indicates that a total of $90 million was liquidated in the crypto market over a 4-hour period, with an alarming $650 million wiped out in the last 24 hours. Specifically, liquidations included $75 million in long positions and $15 million in short positions, which catalyzed the market’s sell-off. Over 217,000 traders were affected, with the largest single liquidation occurring on a BTC-USDT swap on the OKX exchange, amounting to $15.56 million.

Analysts at Bernstein have set an ambitious price target for Bitcoin at $90,000 by the year’s end. The price of Bitcoin reached a new all-time high of $81,858 today, reinforcing a bullish outlook for the leading cryptocurrency. However, concerning signals from the derivatives market raise alarms about a possible major sell-off that could precipitate a market crash. Notably, Bitcoin’s implied volatility (IV) has plummeted across all maturities, particularly in the BTC at-the-money (ATM) 7-day IV, which reflects market expectations regarding future price movements. This decline suggests that options traders currently anticipate no further significant increases in Bitcoin’s price. Consequently, other major cryptocurrencies, including Ethereum, Solana, XRP, and Dogecoin, have also experienced price drops, leading to a wider sell-off across the crypto landscape.

Attention on Mt. Gox Movements

Additionally, recent data from Arkham revealed that Mt. Gox transferred 30,371 BTC—equivalent to approximately $2.44 billion—to two separate wallets on Monday. This action has stirred unease among investors, as it typically signals an impending sale of tokens by an exchange. Furthermore, China’s new stimulus measures, which include a significant 10 trillion yuan debt package, have disappointed market participants, causing a shift in overall sentiment.

As the market anticipates major policy shifts under the Trump administration, upcoming economic indicators—including US CPI and PPI inflation data, jobless claims, and a speech from Fed Chair Jerome Powell—are all poised to impact the cryptocurrency landscape. Economists expect inflation data to be elevated, potentially influencing market dynamics alongside political developments in the US. Despite the prevailing skepticism, some analysts maintain a bullish outlook for Bitcoin’s long-term price trajectory. Veteran trader Peter Brandt predicts that a complex continuation of the inverse head-and-shoulders pattern could propel Bitcoin’s price target to nearly $125,000 by the end of the year, with a long-term goal of reaching $300,000. While this pattern remains contentious, it has garnered interest from notable analysts including Richard W. Schabacker, Robert Edwards, and John Magee.

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