President Joe Biden’s withdrawal from the 2024 presidential race caused a significant drop in the cryptocurrency market, leading to a massive liquidation of long positions. Within 30 minutes of Biden’s announcement, nearly $67 million worth of leveraged long positions were liquidated.
Immediate Market Impact
The rapid sell-off occurred between 5:30 PM and 6 PM UTC on July 21, following a 2.3% decline in Bitcoin’s price to $65,880. This sudden dip prompted the liquidation of many long positions.
Quick Recovery and Further Liquidations
Despite the initial downturn, Bitcoin rebounded quickly, reaching a 24-hour high of $68,480. This swift recovery caused traders with leveraged short positions to incur a combined loss of $34 million.
Markus Thielen, founder of cryptocurrency firm 10x Research, commented on the situation, stating, “Biden was not credible to beat Trump, so an alternative candidate could have limited Trump’s chances. But there is no credible alternative … hence BTC pump.” Thielen also noted that a “huge” buy order contributed to the rapid market recovery.
Broader 12-Hour Liquidation Overview
In a wider 12-hour timeframe, the cryptocurrency market saw over $81.1 million in long positions and $53.4 million in short positions liquidated between 10 AM and 10 PM UTC on July 21. This included $43.8 million in Bitcoin and $31.1 million in Ether, with Solana experiencing $8.6 million in liquidations.
These combined liquidations, totaling $134.5 million, were the highest over a 12-hour period since July 8. Most of the liquidations occurred on Binance and OKX, with $64.5 million and $44 million, respectively.
With Biden stepping down, Vice President Kamala Harris is considered the likely replacement for the Democratic candidacy. According to decentralized predictions platform Polymarket, Republican candidate Donald Trump has a 64% chance of winning the 2024 election, followed by Harris at 31%.
