Biden’s Election Withdrawal Sparks $67M Crypto Liquidation in 30 Minutes

Key Takeaways:

• Biden's withdrawal caused a sharp 2.3% Bitcoin dip, followed by a quick recovery.
• $67 million in leveraged long positions were liquidated within 30 minutes.
• Bitcoin briefly touched $68,480 after the initial dip, causing $34 million in short position losses.

U.S. President Joe Biden's withdrawal from the 2024 presidential election race on July 21 sent shockwaves through the cryptocurrency market, triggering a brief but significant period of volatility. 

This sudden political development led to major market movements and substantial liquidations in both long and short positions across major cryptocurrencies.

Market Reaction to Biden's Withdrawal

The cryptocurrency market experienced a sharp decline, followed by a swift recovery after President Biden's announcement of his withdrawal from the upcoming November presidential election in the U.S.

🇺🇸 The news of Joe Biden's rejection of the democratic representation in the upcoming US election led to an immediate small panic drop in crypto prices.

Though wildly different circumstances, the news of the Trump attempted assassination from 2 weeks ago caused a similar price… pic.twitter.com/X3fbWYSPwk

— Santiment (@santimentfeed) July 22, 2024

Between 5:30 pm and 6:00 pm UTC on July 21, Bitcoin's price fell by 2.3% to $65,880, a sharp decline that resulted in the liquidation of nearly $67 million worth of leveraged long positions within a 30-minute window.

However, the market's response was far from one-sided as Bitcoin quickly rebounded, reaching a 24-hour high of $68,480. 

This rapid recovery swept many traders off their feet, particularly those with leveraged short positions who accounted for a combined loss of $34 million.

Meanwhile, Markus Thielen, founder of cryptocurrency firm 10x Research, offered insight into Biden’s withdrawal as he stated that:

“With Joe Biden dropping out of the US Presidential race, no credible candidate can seriously challenge Donald Trump. The November election appears to have been decided without a single vote.”

Thielen also noted that a “huge” buy order hit the market around the same time, contributing to the sharp recovery.

The ripple effects of Biden's withdrawal extended beyond the initial 30-minute window. Over 12 hours from 10:00 am to 10:00 pm on July 21, the cryptocurrency market witnessed more than $81.1 million in long-position liquidations and $53.4 million in short-position liquidations.

12-hours Liquidation Heatmap/Source: Coinglass

The liquidations were not limited to Bitcoin. Ethereum (ETH) saw $31.1 million in liquidations, while Solana (SOL) accounted for $8.6 million. 

Other major cryptocurrencies also experienced significant price movements, with Cardano's ADA and Solana's SOL adding as much as 5% and Dogecoin (DOGE) briefly jumping more than 8%.

Record-Breaking Crypto Liquidations and Market Resilience

According to Coinglass data, the combined crypto liquidations during the last 12 hours totaled $134.5 million, marking the highest amount since July 8. 

Cryptocurrency exchanges Binance and OKX bore the brunt of these liquidations, handling $64.5 million and $44 million, respectively.

However, amidst this volatility, there were promising signs from institutional investors who bought the dip. 

Japanese investment firm Metaplanet Inc. showcased a bullish sentiment by buying the dip. The investment firm bought 20.381 BTC, valued at approximately 200 million yen ($1.27 million.)

This latest purchase brought the firm's total Bitcoin reserves to a substantial 245.992 BTC.

Metaplanet's strategic embrace of Bitcoin as a treasury reserve asset started in May as a response to combat Japan's economic challenges. 

The company cited concerns over high government debt levels, prolonged negative real interest rates, and a weakened yen as key motivators for using Bitcoin to hedge against economic hardship.

Metaplanet reported that the average purchase price across its entire Bitcoin portfolio is 9.96 million yen (approximately $63,250) per Bitcoin.