📉 Political Tensions Trigger Sharp Bitcoin Decline — Sentiment Turns Bearish Swiftly!

Bitcoin (BTC) saw a sharp drop in the past 24 hours, briefly plunging to $100,984. This significant move reflects rising volatility in the crypto space following a heated exchange on social media between Donald Trump and Elon Musk.

Investor sentiment quickly shifted to risk aversion after the online clash. The overall crypto market cap dropped by 4%, sliding from over $3.4 trillion to around $3.33 trillion. This pullback was mirrored in the derivatives market, suggesting growing caution among traders.

Derivatives Point to Rising Bearish Mood

According to Darkfost from CryptoQuant, Binance’s net taker volume — a measure of aggressive buying and selling — saw a drastic reversal, tumbling from $20 million to -$135 million within just eight hours. This signals a swift pivot as traders rushed to either hedge their positions or bet on further downside.

Darkfost noted this was the largest intraday taker volume flip on Binance in 2025. When high-profile figures dominate the headlines, market sentiment can pivot rapidly. Uncertainty led to a surge in short positions and added selling pressure.

The turbulence also hit BTC perpetual futures funding rates. After initially ticking higher, funding on Binance swung from +0.003 to -0.004 — a sign of bearish positioning intensifying.

Historically, such negative funding rates have preceded strong rebounds. Darkfost highlighted three prior examples: BTC surged from $28,000 to $73,000 in October 2023, from $57,000 to $108,000 in September 2024, and from $97,000 to $111,000 in May 2025 following similarly bearish sentiment.

While extreme pessimism can often mark a turning point, it’s not always a guarantee. In March 2025, for instance, trade tariff news further fueled a downward spiral despite already-negative sentiment.

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