Cryptocurrency purchases record $700 million in liquidations as Trump’s Bitcoin plans roll back

Bitcoin’s (BTC) decline has escalated into more than $700 million worth of liquidations across futures contracts tracking the major tokens, with XRP and dogecoin (DOGE) products recording unusually high losses.

Bitcoin fell below $100,000 in the late US hours before rebounding slightly during the early Asian hours on Thursday, as the Federal Reserve hinted at some interest rate cuts in 2025. Then-Fed Chairman Jerome Powell said in a press conference Yet the Federal Open Market Committee said the central bank was not. Owning Bitcoin is allowed under current regulations – in response to a question about President-elect Donald Trump’s strategic reserve promises.

“This is something that Congress should consider, but we are not seeking to change the law,” Powell said. In the July campaign, Trump said the government would hold 100% of all bitcoins it currently holds or acquires in the future under his administration — a reference to the seized stock of bitcoin held by the country.

Bitcoin fell 3% after Powell’s comments, causing major currencies to decline. Ripple, Dogecoin (DOGE) and Solana were down as much as 5.5%, with BNB and Ethereum (ETH) down 2.5%. Chainlink’s LINK performed the worst with a 10% decline — erasing some of the gains made earlier in the week as Trump-backed World Liberty Financial bought $2 million worth of tokens.

The market decline led to more than $700 million in bullish bets being liquidated, with futures tracking smaller altcoins and tokens recording higher losses than Bitcoin or Ethereum futures in an unusual move, the data shows.

Liquidation occurs when an exchange forcibly closes a leveraged trader’s position due to the trader’s inability to meet margin requirements. Large-scale liquidations can indicate extreme market situations, such as panic selling or buying.

A series of liquidations may indicate a turning point in the market, where a price reversal could be imminent due to an overreaction in market sentiment.

Some traders say Powell’s comment may represent a local peak, dampening expectations of a continued rally towards the end of the month.

“Cryptocurrency markets may have entered their peak if the US Bitcoin Strategic Reserve no longer exists, as that promise helped fuel recent months’ surge to new all-time highs,” Nick Rock, director of LVRG Research, shared with CoinDesk in a wire message. Although a rate cut would typically have a bullish reaction because it was largely expected, the market reacted strongly after Fed Chairman Jerome Powell said inflation would be an ongoing issue throughout next year.”

However, traders at Singapore-based QCP Capital remain generally optimistic for the year ahead.

“Don’t be shaken from your positions if a decline occurs. With 2025 set to be a potentially bullish year for cryptocurrencies, especially with Trump in office, continuing on this path could be beneficial,” the company said in a message broadcast Thursday.