- Bitcoin fell 2.8% to $109,882, leading to $940 million in long position liquidations.
- The removal of Federal Reserve Governor Lisa Cook by President Trump caused sharp market reactions.
- The U.S. dollar index dropped 1% before stabilizing, while major U.S. futures also declined.
- Investors are awaiting second-quarter GDP revisions and core PCE inflation data for clues about the Federal Reserve’s next rate decision.
- Analysts warn that Bitcoin’s drop below the recent average cost could signal further market weakness.
Bitcoin extended recent losses on Monday, dropping 2.8% to $109,882. The slide followed the firing of Federal Reserve Governor Lisa Cook by President Trump, which impacted broader financial markets.
According to CoinGlass, over $940 million in long positions were liquidated in the past 24 hours as capital moved away from riskier assets. “Capital is rotating out of risk, with thin weekend liquidity amplifying swings,” said Rachael Lucas, a crypto analyst at BTC Markets.
The recent dip pushed Bitcoin under $110,800, which Glassnode identified as the average cost for investors who bought within the past three months. “Historically, failure to hold above this level has often led to multi-month market weakness and potential deeper corrections,” Glassnode stated on X.
After the market closed, a resignation letter from Cook was posted on TruthSocial, citing allegations of “deceitful and potentially criminal conduct” involving documentation about her primary residence. The news drove the U.S. dollar index down by 1%, before it recovered to 98.32. U.S. futures for major stock indexes dropped by 0.25%.
Economics professor Justin Wolfers commented on X that “Markets don’t think this move helps American business” and “This move serves Trump, but not America.”
Attention now shifts to the revised second-quarter GDP data, set for release Thursday. Economists expect growth to edge up to 3.1% from a prior 3%. Year-over-year core PCE inflation, which tracks consumer spending changes, is forecast to rise from 2.8% to 2.9% according to MarketWatch.
A weaker growth figure or higher inflation rate could influence the Federal Reserve’s decision on possible rate cuts next month.
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