On Monday, Bitcoin surged above the $88,000 mark, reaching its highest price since late March. That spike was with the U.S. dollar declined precipitously and political uncertainty over the Federal Reserve increased. The crypto then went on to trade close to $86,800 afterwards, an impressive jump. This sudden price move resulted in the largest Bitcoin short position liquidations in history. Consequently, traders lost more than $97 million in the last 24 hours alone.
The catalyst for Bitcoin's jump appears to be former President Donald Trump's recent comments on Truth Social regarding Federal Reserve Chair Jerome Powell. Trump stated that "Powell's termination cannot come fast enough," intensifying his criticism of the Fed and its leadership.
These comments came at the same time as one of the largest declines in the U.S. dollar, which fell to a three-year low. The U.S. Dollar Index declined by more than 1%, hitting its lowest levels since March 2022. This decline represents a growing concern that there will be future politically motivated meddling in the Federal Reserve’s monetary policy decisions.
The evidence suggests that investors are playing it safe by fleeing the U.S. dollar and into safe-haven alternative assets such as Bitcoin. Bitcoin’s recent price run up is a signal of this change taking place front and center in our current political and economic chaos.
The increase in gold prices played a role in Bitcoin’s price increase. Gold continued its historic rally above $3,420 per ounce. Gold reached its highest price in history, cementing the further flight into safe-haven assets.
As a result, despite the huge Bitcoin surge Ethereum, the second-largest crypto by market cap, was flat lined around $1,624. Ethereum is down over 20% in the past month. Ethereum shorts $26 million liquidated In total, across the wider cryptocurrency market, total liquidations neared $180 million.
