Bitcoin is returning to pre-election price levels, weakening confidence in "bullish momentum driven by pro-crypto policies," especially after World Liberty Financial (WLFI) sold $50 million worth of Bitcoin and a wave of large-scale liquidations.
While expectations for bills and signals supporting cryptocurrencies remain, Bitcoin's technical performance and the macroeconomic context (weak USD, strong gold price, high inflation) are causing investors to question the sustainability of the "Trump narrative."
- Bitcoin has fallen 17.14% since the beginning of 2026 and has erased much of its post-election gains, dropping below its opening level of around $63,000 on election day.
- WLFI sold $50 million worth of BTC at the same time the market recorded approximately $2 billion in liquidations and over 500,000 traders were liquidated.
- BTC ETFs recorded $434 million in outflows, with BlackRock's IBIT experiencing a net outflow of $175 million, further increasing cautious sentiment.
Bitcoin erases post-election gains and dampens expectations of "profiting from Trump."
Bitcoin has fallen 17.14% since the beginning of 2026 and retreated below the election opening level of around $63,000, leaving investors questioning whether the momentum from pro-crypto policies is still strong enough to lift the market.
This development means that the price gains since Donald Trump entered the White House (November 2024) have been almost completely wiped out. In the context of such high volatility, the "FOMO market" becomes fragile: even a small shift can trigger a liquidation flight.
From a macroeconomic perspective, the picture doesn't entirely favor risky assets either. As Chia in broader analysis , the USD Index has fallen 8% since the election and hit a 2022 low of 97, while gold has risen approximately 77% over the same period.
Price pressures remain: CPI inflation data shows inflation is still above the Fed's 2% target. This contradicts pre-election expectations and raises the question: if the belief that "Bitcoin will benefit from policy" fades, will risky assets face a larger unwind?
WLFI's sale of $50 million worth of BTC puts market confidence on the test.
WLFI's sale of $50 million worth of Bitcoin has raised doubts about market dynamics, coming at a time when sentiment was already shaky as Bitcoin returned to pre-election levels.
The market's reaction logic is quite clear: if Bitcoin has already retreated to its pre-election price levels, investors will become even more sensitive to any "declining confidence" signals from institutions or entities linked to policy narratives. The news of WLFI selling $50 million worth of BTC therefore became a psychological catalyst.
The immediate impact was described as very strong: over 500,000 crypto traders were liquidated, with the total value of liquidations reaching $2 billion after the news. This suggests the market is in a leveraged state and vulnerable to shocks, although the initial motive may simply have been to reduce strategic leverage.
Notably, confidence has not recovered even after the liquidation, as outflows from Bitcoin ETFs occurred simultaneously. Data tracking BTC ETF inflows shows a total outflow of $434 million, with all six top ETFs recording net outflows; BlackRock's IBIT alone saw a net outflow of $175 million.
With BTC having fallen by over 30% since Q4, pressure on HODLers has increased as many positions have been forced to liquidate. Therefore, the market is questioning whether this is just an isolated "deleveraging" event, or a signal of a broader trend of reduced leverage.
The macroeconomic context and policy impacts are considered "insufficient" to boost risky assets.
When the USD weakens, gold rises sharply, and inflation remains above the Fed's target, the market tends to favor defensive measures, making the positive impact of crypto-friendly regulations and policies less apparent in the short term.
The key lies in expectations and valuations. Before the election, many investors expected a more favorable macroeconomic environment for risky assets. But the fact that the USD Index fell 8% and gold rose about 77% shows that the demand for safe haven and inflation hedge remains very strong, creating the opposite of the "risk-on" narrative.
In such an environment, even supportive policy signals may not be enough to "pull" prices up if the market structure is dominated by leverage and liquidation . Bitcoin's return to pre-election levels, coupled with BTC ETF outflows and large liquidations, are factors that erode confidence in policy-driven upward momentum.
Frequently Asked Questions
Why is Bitcoin returning to pre-election levels important?
This suggests that the price increase linked to post-election expectations has been largely erased, causing investors to doubt the sustainability of the narrative supporting Bitcoin and making sentiment more sensitive to bad news.
What does WLFI's sale of $50 million worth of BTC mean for the market?
This move increased concerns about confidence and could trigger a chain reaction in the leveraged market. According to the original report, following this news, the market saw over 500,000 traders liquidated, with total liquidations amounting to approximately $2 billion.
What does the outflow of funds from BTC ETFs indicate?
Outflow indicates weakening demand through ETFs in the short term. The original text states that BTC ETFs experienced outflows of $434 million, with BlackRock's IBIT experiencing a net outflow of $175 million, contributing to a more cautious sentiment.
How will a drop in the USD and a sharp rise in gold affect Bitcoin?
The USD Index fell 8% and gold rose approximately 77%, indicating increased demand for safe-haven assets, which could make it difficult for risky assets like Bitcoin to maintain their upward momentum if risk-off sentiment prevails, especially as inflation remains above the Fed's 2% target.
