Bitcoin’s weekend surge forced $170 million worth of shorts into liquidation

On Monday, Bitcoin saw its biggest price increase in two months after an assassination attempt on former President Donald Trump.

The cryptocurrency market quickly responded to the news with Bitcoin trading at $63,110, up 4.6% over the past 24 hours – its biggest daily gain since May 20.

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

Trump survived the attack, leading to an increase in his perceived chances of victory in the election.

This development has been widely credited with boosting prices in the crypto market, given Trump’s self-portrayal as crypto-friendly in his attempt to woo undecided voters. The market reaction was particularly pronounced for liquidations.

Total short liquidations over the weekend reached approximately $170 million by early Monday morning, while long liquidations totaled $49.73 million, according to data from Coinglass.

Valentin Fournier, an analyst at BRN, said Bitcoin confirmed the breakout of the downtrend in a major rally led by whales, who bought $4.3 billion as the sale of BTC seized by the German government pushed the price down.

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

However, he also warned of the risk of postings, saying that if prices fall then this leverage will intensify “the potential momentum that a reversal could generate”.

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

The token then suffered a pullback due to moderate inflows, Germany’s sale of seized tokens. A day before the assassination of former President Trump, Germany emptied its wallets of the seized Bitcoin it was selling – which sent BTC into the weekend with a strong tailwind.

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

The firm also highlighted seasonal trends, noting: “Historically, Bitcoin has an average return of +2.7% in August, but typically falls by -4.8% in September, marking a weak seasonal phase.”

Jonathan Hargreaves, Global Head of Business Development and ESG, said Elastos decode that the market has experienced one of those inevitable corrections during an uptrend, and that the question now is the speed and duration of the price increase that will follow.

“Our enthusiasm lies in the emerging economy centered around Bitcoin, which unlocks the existing $1.2 trillion worth of BTC for new DeFi opportunities,” he said. “This potential, coupled with increased user demand and an increasing government openness to support Bitcoin innovation, indicates new strength in both Bitcoin’s price and the underlying motivations for buying 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 full recovery to its peak.

“However, these fluctuations may seem small once we reach $100,000. The main question for both us and the DePIN sector is when Bitcoin profits will start to drive new investment in altcoins, and not just the rotation seen in recent years,” said Trowbridge.

Edited by Stacy Elliott.