Bitcoin Weekend Surge Forced $170 Million Worth of Shorts Into Liquidation

On Monday Bitcoin saw its most significant price jump in two months following an assassination attempt on former President Donald Trump.

The cryptocurrency market responded swiftly to the news with Bitcoin trading at $63,110, marking a 4.6% increase over the last 24 hours—its largest daily gain since May 20.

The Trump incident occurred during a rally in Pennsylvania on Saturday, where the former president suffered a wound to his right ear from a bullet.

Trump survived the attack, leading to a surge in his perceived chances of election victory.

This development has been widely credited for surging prices in the crypto market, given Trump’s self-portrayal as crypto-friendly in his bid to attract undecided voters. The market reaction was particularly pronounced in terms of liquidations.

Total short liquidations through the weekend stood at roughly $170 million by early Monday morning, while long liquidations amounted to $49.73 million, according to data from Coinglass.

Valentin Fournier, an analyst at BRN, said that Bitcoin confirmed the breakout of the downward trend on a large accumulation led by whales, who bought $4.3 billion while the German government’s selling of seized BTC pushed the price down.

Bitcoin is now showing high amounts—about $2.4 billion—worth of leveraged positions between $58,000 and $62,000, Fournier noted. This suggests a very bullish sentiment from investors as Bitcoin is regaining momentum.

However, he also cautioned about the risk that posts, saying if prices backslide then that leverage will intensify “potential momentum a reversal could generate.”

The recent surge comes after Bitcoin hit a record high of almost $74,000 in March, driven by demand for dedicated US exchange-traded funds.

Subsequently, the token experienced a pullback due to moderating inflows, Germany’s sales of seized tokens. A day before the assassination attempt on former president Trump, Germany emptied its wallets of the seized Bitcoin it’s been selling—which sent BTC into the weekend with a strong tailwind.

“Even if Bitcoin’s technically-driven rebound continues briefly, the impending Mt. Gox liquidation could significantly impact the market between August and October,” 10x Research warned in an investor note Monday. “Up to $6 billion of the $9 billion could be sold, potentially influencing market dynamics.”

The firm also highlighted seasonal trends, noting, “Historically, Bitcoin averages a +2.7% return in August, but typically declines by -4.8% in September, marking a seasonally weak phase.”

Jonathan Hargreaves, Global Head of Business Development & ESG, Elastos told Decrypt that the market has experienced one of those inevitable corrections during a budding bull run and that the question now is the speed and duration of the price growth that will follow.

“Our enthusiasm lies in the emerging economy centered around Bitcoin, which unlocks the existing $1.2 trillion value of BTC for new DeFi opportunities,” he said. “This potential, coupled with increasing user demand and a growing government openness to support Bitcoin innovation, indicates a new robustness in both Bitcoin’s price and the underlying motivations for acquiring it.”

Tom Trowbridge, co-founder of Fluence, a decentralized computing platform, said $63,000 marks a critical level for Bitcoin and paves the way for a complete recovery towards its peak.

“However, these fluctuations may seem minor once we hit $100,000. The key question for both us and the DePIN sector is when Bitcoin’s gains will start directing new investments into altcoins, rather than just the rotation observed in recent years,” Trowbridge said.

Edited by Stacy Elliott.