• Bitcoin’s $100k level faces intense pressure as the market balances between liquidity resets and rising fear.
• Nearly $1 billion wiped from leveraged positions in a single day.

Macro headwinds were already putting pressure on crypto, but now political uncertainty is turning that pressure into a full-blown squeeze.

Bitcoin’s [BTC] $100k valuation is hanging by a thread. One more shock, and it could snap.

Meanwhile, the market’s sharply divided. Some view the recent liquidation cascade as a “strategic” liquidity grab to let smart money reload.

Others aren’t buying it, pointing to surging “fear” as evidence of a real breakdown in confidence.

In short, the market structure is fragile. We’re treading a razor-thin line between conviction and capitulation. One more hard squeeze, and Bitcoin might finally pick a side.

Political breakup turns into a market bloodbath

The fallout from Trump and Musk’s showdown hit leveraged players hardest. In just 24 hours, a staggering $981.34 million in liquidations blew up, marking one of the biggest single-day wipeouts we’ve seen in recent memory.

Unsurprisingly, nearly 90% of those wiped were long positions. As the market flipped against them, forced liquidations and frantic manual exits drained close to $880 million straight out of their pockets.

The fallout? Bitcoin slammed 3% lower, logging its biggest daily drop in two weeks, with a low wick at $100,421 – a price it hadn’t touched in almost a month. But that breakdown was just the surface crack.

Source: TradingView (BTC/USDT)

Underneath, sentiment deteriorated fast. 

The Crypto Fear & Greed Index dropped from 55 to 46, slipping deeper towards the “fear” territory. Capital followed the mood: BTC ETFs logged $278.4 million in net outflows, while 2,881 BTC flowed into the top 10 exchanges.

But despite the panic, futures traders didn’t flinch. Bitcoin’s Open Interest (OI) held steady above $70 billion, even ticking up 1.05% at press time.

The lack of broad deleveraging points to one thing: Risk appetite, at least in the derivatives arena, is still alive.

But in a market this volatile, that’s a double-edged sword.

Bitcoin’s $100k level locked in a high-stakes gamble

On the bullish side, many traders are framing the political fallout as a tactical play. A high-stakes maneuver, even a form of “macro manipulation,” aimed at accelerating dovish pivots like rate cuts. 

In that context, the sharp liquidation cascade looks less like panic and more like a coordinated liquidity reset.

How? Despite the violent drawdown, spot markets haven’t seen significant offloading.

In fact, BTC has already retraced nearly 50% of the drop, posting a 1.5% recovery to reclaim $103k at press time, suggesting “dip demand” remains active.

That said, folks are still cautious. The shaky U.S. economy, coupled with Musk’s pushback against a debt-bloating bill, sets the stage for a potential capital flight back into safer havens like bonds.

Source: Trading Economics

If Treasury yields keep sliding, that hefty liquidity stacked up in Bitcoin derivatives could turn into a ticking speculative bubble ready to pop.

Retail traders, in turn, might steer clear of risk, and that selling pressure could easily shove BTC back under the $100k threshold.

So while Bitcoin has saved itself this time, the battle between bullish conviction and looming capitulation is far from over.