Bitcoin Plunges Below $60K: Erasing Trump Rally Gains Amid Liquidation Storm

Bitcoin just delivered a gut punch to bulls. In a flash, BTC tumbled below $60,000, wiping out every ounce of post-Trump election euphoria that had propelled it to dizzying heights. What started as a quick dip turned into a full-blown rout, with the market cap shedding billions in minutes. Traders watched in horror as leveraged positions evaporated, signaling the end of the post-election party.

The rally after Trump's November victory was electric. Bitcoin surged past $100,000 on promises of crypto-friendly policies. But reality hit hard. Fading hype around the new administration collided with traditional finance deleveraging. Strong U.S. jobs data crushed hopes for imminent Fed rate cuts, pushing investors toward safer assets. Heavy liquidations fueled the fire. Overleveraged longs got crushed, creating a cascade effect. On-chain data showed whales dumping BTC to exchanges, adding to the selling pressure. Fear and Greed Index hovered in the extreme fear zone, around 12 out of 100, reflecting widespread panic. Macro headwinds piled on. ETF outflows accelerated, with big players like Grayscale seeing redemptions. Altcoins fared worse, dipping 2-3% or more in the chaos. Ethereum slipped under $2,000, Solana below $80. This wasn't isolated—tech stocks and metals sold off too, pointing to broader risk aversion. Analysts point to liquidity voids below key levels. Futures data screamed bearish, with $60K looking vulnerable. Paul Krugman piled on, calling BTC a failure in a prolonged downturn. Yet, some see this as a healthy shakeout before the next leg up.

The carnage was swift. A $40 billion market cap slice vanished in under 30 minutes during the flash crash. Bitcoin's drop triggered $79 million in long liquidations in an hour alone. Total crypto liquidations topped hundreds of millions, hitting smaller caps hardest. Total market cap plunged toward $2 trillion, down sharply from recent peaks. Bitcoin dominance ticked up slightly as alts bled more, but the sector-wide pain rippled to stocks like MicroStrategy and Coinbase. Institutional moves added fuel—Goldman Sachs disclosed crypto holdings, but overall flows turned negative. Stablecoins like Trump-linked USD1 faced scrutiny amid concentration risks on Binance. Prediction markets buzzed with bets on further downside, pricing high odds of sub-$60K tests.

This plunge marks a reality check for crypto's Trump trade. The euphoria is gone, replaced by sober reassessment. But history shows these bloodbaths often precede monster rallies. With ETF inflows potentially rebounding and regulatory clarity on the horizon, $60K could be the floor smart money buys. Stay vigilant—volatility like this is where fortunes flip. Sources: @pawnie_, @TronWeekly