The crypto market has experienced a wave of liquidations in the past 24 hours, totaling a staggering $1.09 billion. A dramatic 10% drop in the market capitalization was seen as major cryptocurrencies experienced a downturn. The rollercoaster movement followed a brief period of optimism triggered by US President Donald Trump’s announcement to create a crypto strategic reserve, which included a shift from solely Bitcoin to incorporating altcoins like XRP, ADA, and SOL.

Trump’s announcement initially sparked a rally, with cryptocurrencies surging by double digits, gaining more than $340 billion in market cap within a few hours. However, this surge was short-lived, as analysts warned that the market overreacted, and the value quickly retreated. At the time of writing, the market cap stands at $2.77 trillion, down from a peak of $3.15 trillion following Trump’s statement. This shift has left the market with a trading volume of $186.45 billion, marking a significant drop.

Looking at the liquidation data from Coinglass, long positions were hit hardest, with $934.05 million in liquidations, while short positions totaled $153.50 million. Liquidation occurs when traders are forced to close their positions, often resulting in a cascading effect that accelerates the market’s downturn. The sharp price movements show the volatility that remains at play in the crypto space.

Trump’s plan, which was initially touted as a move to create a Bitcoin reserve, has since evolved into a broader crypto reserve that includes other altcoins. Despite the initial optimism that followed the announcement, market sentiment has returned to caution. Bitcoin, which had surged to nearly $95K following Trump’s post on Truth Social, is now trading around $83K, marking an 8.40% drop from its peak.

Despite the initial price rally, the lack of a clear timeline and the absence of substantial details regarding the reserve have left many skeptical. Industry leaders have been quick to voice their concerns. Former BitMEX CEO Arthur Hayes described the announcement as little more than words and challenged the US government to revalue gold in order to purchase Bitcoin. Similarly, major crypto figures like Coinbase CEO Brian Armstrong and Gemini co-founder Tyler Winklevoss have shared their view that Bitcoin is the only cryptocurrency truly suited for creating a strategic reserve.

Meanwhile, well-known gold advocate and financial commentator Peter Schiff labeled Trump’s announcement and the market’s reaction as “the biggest rug pull of all time.” Schiff has even stated that a Congressional investigation is underway to determine the true motivations behind Trump’s post on Truth Social. Regardless of the investigation’s findings, the crypto market is left in a precarious position, with over $1.09 billion in liquidations and many investors wondering what comes next for the industry.

As the market faces increased uncertainty, it’s clear that the fallout from Trump’s announcement and the volatile nature of the crypto space continue to have significant repercussions. Traders and analysts alike are now looking for signs of stability or further turmoil in the coming days.