On Sunday, the cryptocurrency market experienced a swift reaction following President Joe Biden’s unexpected announcement that he would not be running in the 2024 presidential election. Bitcoin prices quickly plummeted, causing significant liquidations of long positions, but the decline proved to be short-lived.

Bitcoin Prices Drop and Recover

Bitcoin’s price dropped from $67,453 to $65,884 within a span of 30 minutes, according to data from CoinGecko. The abrupt market movement was likely triggered by the uncertainty surrounding the presidential election shakeup. This decline was mirrored by other major cryptocurrencies, including Ethereum and Solana, which also saw brief price drops, indicating a broader market impact.

Despite the initial plunge, the market quickly rebounded. Bitcoin’s price surged to a high of $68,284, a level not seen since June 12, before stabilizing. As of the latest data, Bitcoin is trading just below its peak. Similarly, Solana reached its highest price in two months, trading near $185.

Reason for Rebound

The rebound was bolstered by President Biden’s endorsement of Vice President Kamala Harris as the Democratic candidate for the upcoming election. This endorsement appeared to reassure investors, contributing to the recovery in cryptocurrency prices. Meanwhile, presumptive Republican candidate Donald Trump, who has endorsed crypto heavily in his campaign speeches, said that it would be easier to beat Harris in an interview.

Notably, meme coins minted on the Solana blockchain also saw significant activity. The Kamala Harris-themed coin, KAMA, surged to a new all-time high of over $0.025 before cooling off. In contrast, the Biden-themed token “Jeo Boden” (BODEN) plummeted, losing 52% of its value on the day and nearly 99% from its peak in April.

Liquidations

The market volatility resulted in substantial liquidations of both long and short positions. Data from CoinGlass revealed that over the past 24 hours, nearly $159 million worth of positions were liquidated. Long positions accounted for the majority, with $99 million in liquidations, a significant portion of which occurred during the initial price dip following Biden’s announcement. Bitcoin led the liquidation tally with $46 million, followed by Ethereum with $31 million.

This episode underscores the sensitivity of the cryptocurrency market to major political events and announcements. While the immediate reaction was negative, the market’s rapid recovery highlights the resilience and ongoing interest in digital assets among investors. As the political landscape evolves, market participants will continue to closely monitor such developments and their potential impacts on cryptocurrency prices.

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