The crypto market took a sharp hit this week as over $1 billion worth of crypto positions were liquidated in just 24 hours. Bitcoin is down 4% sitting at $103,720, Etherum is down 5.8%, while XRP is down 2.59% in the last 24h. Infact, right now, the whole crypto market is in the red. So, what is going on?
Elon Musk vs. Donald Trump: A Political Feud Spooks Markets
This all started when Elon Musk openly criticized a controversial U.S. Congress spending bill that Donald Trump supports, calling it “ “bankrupting America” and urging lawmakers to “KILL the BILL.”
In response to this, Trump fired back, suggesting cutting off government contracts and subsidies to Musk’s companies, stating “The easiest way to save money in our Budget, Billions and Billions of Dollars is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
Meanwhile, Musk fired back sharply, saying, “SpaceX will begin decommissioning its Dragon spacecraft immediately” due to the potential loss of contracts.
Adding fuel to the fire, Musk made a startling claim, saying Trump “has been named in the Epstein files, which is the reason he hasn’t released them yet.” This feud has unsettled not just the stock market but also crypto traders who often react strongly to political and economic uncertainty.
Liquidations Top $1 Billion as Traders Face Heavy Losses
As the tension rose, the market couldn’t hold up and traders holding leveraged crypto positions found themselves caught in a brutal liquidation wave. According to data from Coinglasss, more than $1 billion worth of crypto positions were liquidated within a single day, making it the largest long liquidation since February 25.
Bitcoin and Ethereum alone saw more than $600 million wiped out. Bitcoin alone accounted for $341 million in daily liquidations, with over $300 million coming from long positions, now trading at $100,372 at the time of writing this report.
Ethereum futures weren’t spared either, with $260 million in daily liquidations and a 5.5% drop in open interest.
One of the biggest shocks came from high-profile trader James Wynn, who lost 155.38 BTC,which is roughly $16.14 million, forcing him to close all his long positions.
It doesn’t stop there, as institutional players also saw an outflows of $278 million in Spot Bitcoin ETFs, which shows that even big money is getting cold feet
Market Pressures Mount: Options Expiry, Tariffs, and Whale Moves
The political clash isn’t the only stressor facing crypto markets.Traders are also bracing for a huge options expiry, with 3.8 billion in Bitcoin and Ethereum options set to expire today at 8:00 UTC on the largest derivatives exchange Deribit.
For Bitcoin, with a max pain point at $105,000. BTC is currently trading at $103,743.82.
Ethereum is facing the same heat, with 242,584 ETH options worth $588 million expiring. Its max pain point is $2,575, but ETH remains below $2,500.
At the same time, the whales are also making moves. Just recently, a large holder dumped 917 BTC worth $94 million onto Binance. Another whale moved 26.6 million XRP tokens (worth nearly $58.9 million) to Coinbase, and a staggering 2.86 trillion SHIB tokens were sent to exchanges, signalling fear and an urge to exit before things get worse.
Conclusion
The crypto market is clearly in a tight spot with pressure coming from every angle, from the Elon Musk and Donald Trump feud to the wave of liquidations shaking traders’ confidence.
At the same time, options worth $3.8 billion are set to expire, and they’re far from the max pain levels, adding more stress for traders.
One thing’s certain: until the politics settle, the whales calm down, and market structure resets, crypto’s path forward will be anything but smooth.
