With long traders losing nearly $790 million in liquidations, the crypto market remains on edge as investors await further signals from Trump’s administration on regulatory policies.
The crypto market has suffered a major downturn, with total liquidations soaring to $854 million as traders react to shifting market sentiment. The sell-off follows weeks of bullish momentum fueled by optimism over Donald Trump’s election victory, which had pushed Bitcoin price to a peak of $109,000 on January 20.
However, confidence wavered after Trump failed to mention cryptocurrency in his inauguration speech, leading to widespread market corrections.
Bitcoin Leads the Liquidation Wave
As of Monday, January 27, the rapid price drop triggered massive long position liquidations totaling $794 million, while short sellers faced $59 million in losses. The sharp downturn underscores the volatility of the crypto market and the risks faced by leveraged traders during uncertain periods.
Bitcoin BTC $87 418 24h volatility: 0.8% Market cap: $1.73 T Vol. 24h: $29.17 B was at the center of the liquidation storm, contributing over $259 million to the total wipeout. Ethereum ETH $2 057 24h volatility: 0.4% Market cap: $248.04 B Vol. 24h: $11.78 B followed with more than $110 million, while XRP XRP $2.45 24h volatility: 0.9% Market cap: $142.64 B Vol. 24h: $2.30 B traders saw $33.93 million in liquidations. Other cryptocurrencies combined accounted for $179.72 million, demonstrating the broad impact of the market crash.
One of the most significant liquidation events took place on HTX (formerly Huobi), where a BTC-USDT order worth $98.46 million was liquidated — the largest single liquidation order recorded during this period. The sheer scale of this trade highlights how leveraged traders were caught off guard by the sudden market downturn.
Trump’s Crypto Working Group Takes Shape
Despite his silence on Inauguration Day, Trump has since formed a crypto working group to assess regulations and promote digital asset innovation in the United States. Last week, Trump issued an executive order requiring the group to review existing regulations and recommend updates within 180 days.
The group, chaired by David Sacks, Trump’s Special Advisor for AI and Crypto, includes officials from the Treasury Department, the Justice Department, and the Securities and Exchange Commission (SEC).
However, on Friday, Coinspeaker reported that Trump excluded key agencies like the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) from the group. The two agencies played a significant role in restricting crypto firms’ access to banking under the previous administration.
What’s Next for Crypto Markets?
With Trump’s executive order now in place, investors are watching closely for the working group’s initial findings. While the administration’s actions suggest a pro-crypto stance, regulatory clarity remains a key concern.
Analysts believe that the recent market pullback could be part of a natural correction following Bitcoin’s rapid ascent beyond $100,000. However, uncertainty surrounding regulatory decisions and macroeconomic factors could continue to fuel volatility.
As traders adjust their strategies, the coming months will be crucial in determining whether Trump’s policies will drive a renewed crypto boom — or if lingering regulatory uncertainties will keep markets on edge.
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