US Rules Out Bitcoin Purchases, $1B Crypto Liquidations Ensue
US Treasury Secretary Scott Bessent confirmed in a Fox Business interview that the government will not buy additional Bitcoin for its strategic reserve, opting instead to grow its holdings through confiscated assets and halting all BTC sales. This announcement intensified recent market volatility, driving Bitcoin down toward $118,000 after a brief surge above $124,000.
Amid this turbulence, derivatives traders faced massive losses as crypto liquidations reached nearly $1 billion over the past 24 hours, according to CoinGlass data. Long positions bore the brunt with $747 million forcibly closed. By asset, Ethereum-led contracts topped the list at $312 million in liquidations, followed by Bitcoin at $214 million. Altcoins Solana and XRP saw $66 million and $56 million wiped out, respectively.
The decision to pause direct Bitcoin purchases removes a potential demand driver and coincides with a broader push by the government to build crypto reserves via seized holdings. Traders should watch for continued price swings and assess open positions carefully as market participants digest both the strategic shift and the recent wave of forced liquidations.
Bearish
The refusal by the US Treasury to purchase more Bitcoin removes a key potential demand source, while the $1 billion in crypto liquidations highlights severe deleveraging among derivatives traders. Such forced sell-offs often trigger further short-term declines as margin calls intensify volatility. Historically, similar spikes in liquidations—like during the March 2020 crash—led to rapid price downturns before markets stabilized. In the near term, trading activity is likely to remain cautious with elevated sell pressure. Long-term effects hinge on regulatory clarity and institutional adoption but, for now, sentiment and technical indicators point to a bearish outlook.