Bitcoin collapsed to $72,863 Tuesday, erasing the entirety of the "Trump Trade" premium and marking its lowest price since the November 2024 election. The breakdown, driven by a liquidation cascade, has placed nearly half of the circulating supply in a loss-making position, signaling a potential structural shift in market behavior.
Leverage Flush Wipes $620M
The move was not a slow bleed but a violent flush. Over $620 million in leveraged long positions were liquidated in 24 hours as Bitcoin sliced through the psychological $75,000 and $73,000 support zones. The asset is now down over 15% year-to-date, decoupling violently from the broader equities market.
While the S&P 500 showed resilience, the crypto-specific sell-off indicates a capital rotation. Safe-haven assets like gold and silver rallied simultaneously, highlighting a flight to safety that bypassed digital assets entirely amid rising geopolitical tensions.
Glassnode: The Capitulation Risk
The on-chain picture has deteriorated sharply. Analysis from Glassnode reveals that 44% of the Bitcoin supply is now held at a loss. This is a critical threshold; when nearly half of all coins are "underwater," the probability of panic selling from short-term holders increases exponentially.
Current flows suggest sentiment has shifted meaningfully. Investors are not yet positioned to buy the dip.
This shift in sentiment is visible in the altcoin market, which suffered heavier losses. Ethereum (ETH) tumbled 10% to trade near $2,100, while Solana (SOL) lost the $100 handle, falling 10% to $97. XRP slid 6% to $1.52.
Institutional Outlook
The erasure of post-election gains forces a re-evaluation of the 2025-2026 cycle thesis. With the "Trump put" effectively priced out, the market lacks an immediate catalyst to stem the bleeding. Traders are now eyeing the $70,000 level; a breach there would expose air pockets down to the 2024 consolidation ranges.
