Market volatility following US President Donald Trump’s plans to pick Kevin Warsh as the next Fed chairman caused gold to fall nearly 10%, dragging Bitcoin and the rest of the crypto market with it.
The results?
There were over $1.7 billion in positions liquidated in the past 24 hours, affecting more than 270,000 traders, with leveraged bulls suffering the largest losses at $1.6 billion, according to Coinglass data.
The general selling pressure threatened to burst BTCs Support level at $80,000, with most large-cap altcoins seeing an average price drop of 7-10%.
Source: Velo
BTC in particular briefly fell to $81,000 before stabilizing to $82.3,000 at the time of writing. For Ethereum [ETH]support at $2.8K was lost, but at the time of writing the altcoin seemed poised to reclaim it.
On the other hand, Solana [SOL] fell 10% to 114 while Ripple [XRP] fell below $1.8 at the time of writing.
In total this amounted to around 200 billion dollars wiped out of the crypto market cap, taking it from $3.0 trillion to $2.8 trillion in the last 24 hours.
Investors are leaving the crypto market
But this wasn’t just a risk that forced some traders and investors to the sidelines. Some were fully existing markets, as evidenced by redemptions on the major stablecoins USDT and USDC.
More than $2 billion in capital earlier this week to leave the stablecoins sector, reducing the dry powder needed to spark a market rally if sentiment improves.
This week alone it was almost $5 billion redeemed of Circle’s USDC, while Tether’s USDT has lost $1 billion in market supply over the past 30 days.
Source: VBCM/X
Furthermore, the debt crisis may herald a healthy pause, but investor departures, reflected in stablecoin dynamics, point to another risk for BTC and the broader crypto market.
For Fundstrat Tom LeeHowever, market uncertainty and turbulence will continue until the new Fed chairman is confirmed.
According to Arkham data, the largest options volumes over the past 24 hours were puts (bearish bets), which hedged against downside risks to $78,000 and $75,000 over the next two weeks.
Source: Arkham
This underlined the market’s extreme caution as institutional players positioned themselves for a potential dip below $80,000. It was unclear whether altcoins would continue to bleed if such a scenario were to unfold.
Final thoughts
- Trump’s planned announcement of the next Fed chairman led to a risk-off mode in all markets
- Some advanced players are now betting on a potential BTC dip to $78K or $75K if bearish pressure continues