The Daily Drip

✅ Top Takeaways

• Leverage gets washed out: Bitcoin dropped as low as $74,541 with roughly $1.6B in leveraged positions liquidated and about $111B erased from total market cap, as thin liquidity amplified forced selling.
• Majors hover near 7‑month lows: ETH is trading near $2,340, XRP around $1.64 and SOL just above $104, all sitting on double‑digit weekly losses as traders de‑risk across the large‑cap complex.
• Warsh shock hits crypto beta: President Trump’s decision to tap Kevin Warsh — known for his hawkish stance on inflation and balance‑sheet discipline — has revived fears that tighter liquidity will keep pressure on high‑beta digital assets.

📰 Crypto Market Summary

Bitcoin dropped as low as $74,541 on Monday, approaching its lowest level since Trump's return to office in April 2025. The cryptocurrency saw $1.6 billion in leveraged positions liquidated over the weekend, with $111 billion wiped from total crypto market capitalization as thin liquidity and forced margin calls accelerated declines.

Ether plunged to $2,290, down 6.6% and trading near seven-month lows as the altcoin selloff intensified. The decline triggered fears of potential multi-billion-dollar liquidations, with major Ethereum whale Trend Research holding $1.33 billion in collateral approaching liquidation thresholds between $1,781 and $1,862.

XRP fell 4.4% to $1.59 on Monday despite climbing 3.17% for the current session, down over 13% for the week. Solana dropped 3% to around $103 after declining 16% over seven days, as both major altcoins failed to escape broader crypto market weakness.

President Trump's nomination of Kevin Warsh as next Federal Reserve Chair triggered immediate selloffs in crypto assets. Warsh's hawkish reputation on inflation and balance-sheet discipline sparked fears of tighter financial conditions, with analysts noting his past criticism of quantitative easing undermined trades benefiting from currency debasement concerns.

For the first time since 2023, Bitcoin's price dropped below MicroStrategy's average purchase cost of $76,052. The company holds over 713,000 tokens worth approximately $53.2 billion at Monday's low, down from $54.2 billion invested, as its stock-issuance accumulation strategy collides with skeptical markets.

MicroStrategy shares fell over 7% in Monday trading, while Coinbase dropped 4% and Robinhood declined 3%. The selloff in crypto-exposed stocks reflected broader investor retreat from digital assets amid mounting macro uncertainty and deteriorating technical conditions across major tokens.

🌍 Macro & Policy Lens

Warsh’s track record of criticizing quantitative easing and favoring balance‑sheet reduction signals a more restrictive backdrop than markets had hoped for, which challenges the “liquidity solves everything” bull case for crypto.

• Rates vs. risk assets: Even if policy rates move lower eventually, a slower or smaller cutting cycle combined with balance‑sheet runoff leaves long‑duration assets like BTC, ETH and growth equities more sensitive to macro data.
• Debasement trade on hold: With gold off its recent highs and the dollar stabilizing, crypto has struggled to attract fresh “hedge” flows, underscoring how narratives can lag when liquidity and positioning are both tight.
• Equity spillover: The 7% drop in MicroStrategy, along with losses in Coinbase and Robinhood, shows how quickly equity markets can transmit crypto‑specific stress to listed proxies and back again.

💰 Flows, Depth & Market Structure

Weekend ETF flows and broad crypto indices were unchanged, but on‑exchange data tell a different story: depth remains thin, and a wave of forced liquidations has pushed prices sharply lower even without large spot sellers.

With Bitcoin dipping below MicroStrategy’s average cost and major whales like Trend Research nearing ETH liquidation levels, the market is increasingly sensitive to collateral moves that can trigger additional cascades.

Desk take: until depth rebuilds and leverage resets more fully, rallies are likely to be sharp but fragile, with funding and basis levels offering better clues than ETF headlines about when real risk appetite is returning.

📊 Sentiment Dashboard

🔢 Market Performance

• BTC and ETH remain firmly negative on the week and year‑to‑date, even as several majors show small 24‑hour bounces following the latest liquidation wave.
• TRX is still one of the only large caps positive YTD, while SOL and ADA continue to bear the brunt of altcoin deleveraging with mid‑teens weekly declines.
• Stablecoins like USDT continue to edge higher in market value, suggesting a meaningful share of capital is parked on the sidelines rather than fully exiting crypto.

⚡ Risk & Positioning Lens

With BTC briefly under major corporate cost bases, leverage resetting and macro turning more hawkish, this phase looks more like a slow‑burn deleveraging than a clean, one‑and‑done capitulation.

What to watch next: whether BTC can hold above the mid‑$70K area on closing bases, how quickly order‑book depth rebuilds, and if crypto‑linked equities stabilize — all key signals for when this drawdown may finally be transitioning from “panic management” to genuine accumulation.

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Disclaimer

This newsletter is for informational and educational purposes only and is not investment advice, solicitation, or an endorsement of any strategy or asset. H2cryptO does not warrant data accuracy or completeness. Crypto assets are highly volatile; always consult professional advisors, use caution, and comply with local laws before making strategic, financial, or investment decisions.