U.S. Treasury Halt on Bitcoin Purchases Could Have Triggered $120B Market Drop, Bitcoin Declines and Ethereum Remains Stable

• U.S. Treasury halts Bitcoin purchases, triggering a $120B market drawdown.

• Bitcoin led losses with elevated leveraged liquidations; Ethereum showed relative stability.

• $1B+ in leveraged liquidations reported; market liquidity and risk sentiment were primary drivers.

U.S. Treasury halts Bitcoin purchases — $120B market loss, actionable analysis and investor steps. Read now for risk management guidance.

What happened when the U.S. Treasury halted Bitcoin purchases?

U.S. Treasury halts Bitcoin purchases and announced a pause in acquisitions before a key Federal Reserve speech, prompting rapid risk‑off selling across crypto markets. The announcement removed a known buyer from the market, constraining inflows and contributing to a roughly $120 billion decline in total crypto market capitalization.

How did the market lose $120 billion so quickly?

The $120 billion drawdown was driven by concentrated selling pressure in Bitcoin, on‑chain liquidity tightening, and forced deleveraging. Exchanges recorded over $1 billion in leveraged liquidations in the immediate window. Bitcoin volatility amplified order‑book gaps, while Ethereum and other tokens saw smaller relative moves.

Why did Bitcoin lead losses while Ethereum held steadier?

Bitcoin led the drawdown because the Treasury action directly affected expected BTC inflows, removing a policy‑driven buyer. Bitcoin’s higher market concentration and larger derivatives positions amplified liquidations. Ethereum’s relative stability reflected diversified demand drivers, ongoing decentralized finance activity, and lower direct exposure to the Treasury announcement.

What were the immediate market impacts and data points?

• Market cap loss: Approximately $120 billion wiped from total crypto market capitalization.
• Leveraged liquidations: Over $1 billion in liquidations reported across major derivatives venues.
• Price action: BTC experienced the largest intraday declines; ETH showed smaller percentage moves.
• Liquidity: Order‑book depth thinned during the sell‑off, widening bid‑ask spreads.

Frequently Asked Questions

Will regulatory announcements like this always cause sharp drawdowns?

Not always; the impact depends on the announcement’s novelty, the market’s anticipation, and existing liquidity. Sudden policy shifts with little prior signaling are more likely to trigger sharp corrections.

How can traders protect against forced liquidations?

Reduce leverage, stagger position entries, set stop‑losses at logical support levels, and maintain cash reserves to manage margin requirements during volatile windows.

Key Takeaways

• Immediate impact: Treasury’s pause in BTC purchases removed a buyer and catalyzed a $120B market contraction.
• Market mechanics: Long positions were squeezed, causing $1B+ in leveraged liquidations and reduced liquidity.
• Investor actions: Reassess exposure, prioritize liquidity, and monitor official Treasury and Federal Reserve communications.

Conclusion

The U.S. Treasury’s decision to halt Bitcoin purchases sparked a substantial $120 billion market decline, highlighting crypto markets’ sensitivity to policy changes. Investors should focus on liquidity management, monitor official Treasury and Federal Reserve updates, and align positions with long‑term fundamentals and personal risk limits. For ongoing coverage and analysis, COINOTAG will update this report as official information and on‑chain data evolve.