Bitcoin’s price experienced significant fluctuations on Friday, reaching a high of $68,700 before dropping to a low of $65,853 within 24 hours. The decline occurred shortly after the Wall Street Journal published allegations of a probe into Tether by U.S. authorities. However, Tether and its CEO quickly dismissed the report as old news, but the market still reacted, pushing bitcoin below $66,000. The price later recovered to hover around $66.7K.
The dip resulted in widespread liquidations in crypto derivatives markets, with $233 million wiped out in a day. Over 80,000 traders saw their positions liquidated, affecting $169 million in long positions. Of the liquidated long positions, $34 million were BTC trades and $33.92 million were ETH trades. The largest single liquidation occurred on Binance, with a trader losing $3.59 million in a BTC position.
This event highlights the market’s sensitivity to regulatory news and speculation. Tether plays a crucial role in maintaining liquidity and stability in crypto trading, so any regulatory concerns have a ripple effect. Similar reactions have occurred in the past with events such as China’s crackdowns on crypto, the Mt Gox collapse, Tesla’s endorsement of BTC, and FTX’s troubles.
The upcoming 2024 U.S. election, with former President Trump and Vice President Harris in the race, is expected to have a significant impact on bitcoin due to their differing cryptocurrency stances. Trump has expressed support for crypto with a preference for lighter regulations, while Harris is less vocal but likely to maintain current regulations. Many speculate that a Trump win could ease restrictions and potentially boost BTC prices, while a Harris victory might lead to stricter regulations and reduced institutional interest in BTC.