Bitcoin (BTC) had a volatile day on Monday, briefly touching $64,400 before pulling back to $62,800 within just an hour, amid broader market turbulence. The rapid fluctuations in the cryptocurrency market coincided with a sharp downturn in U.S. equities, particularly the S&P 500 and Nasdaq, both of which fell over 1%. Meanwhile, MicroStrategy (MSTR), the largest corporate holder of Bitcoin, saw its stock surge 5.5%, hitting a six-month high.

$215 Million in Liquidations as Bitcoin Dips

The sharp price swings in Bitcoin resulted in significant liquidations across the crypto derivatives market. Over $215 million worth of leveraged positions were liquidated, split almost evenly between traders betting on a price increase (long positions) and those expecting a decline (short positions). Data from Coin Glass revealed that $110 million in long positions were liquidated, while $105 million in short positions faced the same fate.

Despite the volatility, Bitcoin managed to recover slightly, trading at $63,300 by the end of the day, marking a 0.7% increase over the previous 24 hours.

Altcoins Gain Ground While Ethereum Struggles

As Bitcoin faced turbulence, several altcoins displayed relative strength. Tokens like Near Protocol (NEAR), Uniswap (UNI), and Aptos (APT) posted gains ranging from 5% to 8%. However, Ethereum (ETH), the second-largest cryptocurrency, underperformed, registering minor losses. The broader crypto market, as measured by the CoinDesk 20 Index, recorded a modest 0.3% gain.

FTX Bankruptcy Plan Approval Injects Optimism

One of the key developments that likely contributed to the recovery in cryptocurrencies was the approval of FTX’s bankruptcy plan. A U.S. judge gave the green light to the plan, potentially paving the way for creditor repayments. This news injected optimism into the market, helping Bitcoin recover some of its earlier losses.

Bitcoin Faces Resistance at the 200-Day Moving Average

On the technical analysis front, Bitcoin briefly reclaimed its 200-day moving average, which is currently at $63,575, according to Trading View data. However, BTC was unable to hold above this key level, which would have signaled a continuation of its uptrend from the lows of $52,000 seen in early September. Failing to maintain this level has some traders cautious about Bitcoin’s short-term price direction.

Political Forecasts Boost Bitcoin’s Momentum

An interesting development is the correlation between Bitcoin’s price movements and the evolving U.S. political landscape. ETC Group, a digital asset investment product issuer, noted that Bitcoin’s recent rally coincided with rising odds of Donald Trump winning the upcoming U.S. presidential election in November. According to Polymarket, a blockchain-based prediction marketplace, Trump’s chances of victory rose from 50% on Friday to 53.5% by Monday. This shift in political sentiment may have contributed to Bitcoin’s recent upward price action.

MicroStrategy’s Stock Surges 5.5%

While Bitcoin struggled with volatility, MicroStrategy’s stock (MSTR) stood out, surging to $190 and closing the day 5.5% higher—its highest level in six months. The company, led by Michael Saylor, remains the largest public corporate holder of Bitcoin, with nearly $16 billion in BTC holdings. The rally in MSTR came despite a general downturn in the stock market, underscoring investor confidence in the company’s Bitcoin strategy.

Markus Thielen, founder of 10x Research, noted that MicroStrategy’s breakout above $180 could lead to further gains, even though the stock is currently overvalued by 44% compared to Bitcoin. With hedge funds holding $4.6 billion in short positions on MSTR, Thielen suggested that a continued rally could force market makers to hedge, and short-sellers could face pressure to cover their positions.

What’s Next for Bitcoin and MicroStrategy?

MicroStrategy’s strong performance could have broader implications for the crypto market. If the company continues to see its stock price rise, it may raise additional debt to acquire more Bitcoin, further tightening supply in the market. Additionally, the approval of FTX’s bankruptcy plan and the potential for creditor repayments could inject more liquidity and optimism into the market, potentially fueling further price movements.

As Bitcoin continues to grapple with market turbulence, its ability to hold key technical levels like the 200-day moving average will be crucial in determining its short-term trajectory. Meanwhile, the evolving political landscape in the U.S. could also play a role in shaping investor sentiment as the election approaches.