$1.23B Bullish Crypto Bets Liquidated as Market Dips 3% in Three Days
Total market cap has dropped 3% this week and is now at $3.75 trillion as of Friday. 3 days of losses and investor enthusiasm...
Quick overview
- Total market cap has decreased by 3% this week, now standing at $3.75 trillion.
- Liquidations of long positions reached $1.23 billion over the last three days, indicating profit-taking among investors.
- Despite short-term corrections, the US M2 money supply has hit a record high, potentially benefiting Bitcoin as a hedge against inflation.
- Political pressure for lower interest rates may further strengthen Bitcoin's position as a digital asset amidst economic uncertainty.
Total market cap has dropped 3% this week and is now at $3.75 trillion as of Friday. 3 days of losses and investor enthusiasm waning and altcoin momentum stalling. The big pullback has triggered $1.23 billion in liquidations of long leveraged positions over the last 72 hours, clear sign of profit taking or risk off.
According to CoinGlass, $727 million in positions were liquidated in the last 24 hours. Of that $581 million were longs, way more than the $146 million in shorts. Bulls got caught off guard here.
Key numbers:
- Market Cap: $3.75 trillion
- 24-Hour Liquidations: $727 million
- Long Liquidations: $581 million
- Short Liquidations: $146 million
- Total Long Liquidations (3 Days): $1.23 billion
This liquidation pattern, with longs getting hit harder, is a bull trap – where expectations of further gains were priced in too soon.
M2 Supply May Boost Bitcoin
Despite the short term correction, macro fundamentals may still be bullish for Bitcoin (BTC). As of Friday, US M2 money supply – a measure of cash, checking deposits and near money – has hit a record high of $22.02 trillion. Even with inflation at 2.7% above the Fed’s 2% target.
Historically an expanding money supply injects liquidity into the economy which flows into speculative assets like cryptocurrencies. But the downside is the devaluation of the US dollar and investors looking for alternatives to preserve purchasing power.
Bitcoin with its capped supply of 21 million is looking like a good hedge.
Why it matters:
- More liquidity means more asset growth
- Inflation above target means more dollar erosion
- Institutions are accumulating BTC as “digital gold”
Trump Wants Lower Interest Rates
On Thursday, US President Donald Trump visited the Fed headquarters with Fed Chair Jerome Powell and Senator Tim Scott. While the visit was officially for renovations, Trump didn’t miss the chance to lobby for monetary policy changes.He tweeted: “LOWER INTEREST RATES!” Which matches the FOMC’s guidance for 2 rate cuts in 2025, 50 basis points total.
With more liquidity, inflation and political pressure for easing, Bitcoin’s long term as a hedge may get stronger even if short term volatility spooks the bulls.
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