Market Turbulence: Political Uncertainty Triggers Major Crypto Selloff Across BTC, ETH, SOL, and DOGE

The Fed Drama Reshapes Crypto Landscape

The cryptocurrency market experienced a significant downturn following escalating tensions between the US administration and the Federal Reserve. On Monday, President Donald Trump dismissed Fed Governor Lisa D. Cook, marking an unprecedented move in American history—the first time a sitting White House has attempted to remove an active Fed voting member. Fed Governor Cook has responded by pursuing legal action, asserting that Trump lacks the constitutional authority to remove her.

This political uncertainty has rippled through financial markets, creating immediate pressure on digital assets. With critical questions now surrounding the Fed’s September FOMC monetary policy direction, investors have adopted a defensive posture, triggering a wave of liquidations across the sector.

Heavy Selling Pressure Creates Thin Market Conditions

The market deterioration manifests across multiple fronts. Over $829 million in long liquidations has been recorded in the last 24 hours alone, indicating forced selling and deleveraging across major exchanges. What’s particularly notable is how thin order books have amplified volatility—with reduced liquidity depth, even moderate selling volume produces outsized price movements.

Bitcoin (BTC) has been hit hardest among major assets, declining over 3% as price action slipped below the $109,000 level. Current data shows BTC trading at $88.23K with a 24-hour change of +0.43%, though trading volume remains elevated at $285.85M daily. The $225 million in BTC long liquidations over 24 hours underscores the intensity of the capitulation.

According to blockchain analytics firm Glassnode, Bitcoin now faces a critical technical junction at approximately $110,800—representing the average acquisition cost for investors who accumulated during the May-July rally. Failure to maintain this support level could trigger cascading liquidations and deeper corrections in coming weeks.

Altcoins Face Broad-Based Weakness

Beyond Bitcoin, the damage has been distributed across the altcoin complex. Ethereum (ETH) declined 0.06% in 24-hour trading, while Solana (SOL) and Dogecoin (DOGE) showed weakness at -0.40% and +0.14% respectively. This represents a classic “risk-off” rotation, where capital systematically exits speculative positions.

Despite recent institutional inflows into Ethereum-linked products, the overall sentiment has shifted decisively negative. SOL, XRP, and DOGE have all encountered significant resistance from key technical levels as selling pressure intensifies. The thin market conditions mean these assets are particularly vulnerable to sudden momentum shifts.

September’s Historical Weight and Forward-Looking Concerns

Market participants are acutely aware of September’s historical reputation as one of the weakest months for cryptocurrencies. Compounding this seasonal headwind is the lingering uncertainty around whether the Fed will implement a 25 basis point rate cut during the upcoming September meeting. CME Watch Tool data currently indicates an 84.7% probability for this cut, though Trump’s actions have introduced unprecedented political volatility.

Analysts broadly expect investors to endure additional downside before the typical October-November recovery cycle reasserts itself. The combination of seasonal weakness, thin trading liquidity, and macro uncertainty has created an environment where quick sentiment reversals are possible but not guaranteed.

The broader question facing traders: Will the market stabilize once Fed policy clarity emerges, or will political tensions continue to override fundamental monetary policy expectations?