Over $500M Liquidated in Crypto Sell-Off Following Market Reversal

Heavy Liquidations Hit Crypto Market

On late Monday, the crypto market saw a sudden and sharp drop. This triggered more than $500 million in long liquidations. Bitcoin (BTC) fell from its weekend highs. Traders reacted to news about the cooling trade tensions between the U.S. and China.

Source: CoinGecko

In the last 24 hours, long positions totaling more than $530 million were liquidated, according to Coinglass. The revenue from bitcoin futures was around $200 million. Products made using Ether (ETH) made up about $170 million. Gains made earlier in the week were negated by these liquidations.

When a trader's leveraged position is closed by an exchange, a liquidation takes place. This is because there is not enough margin. To put it plainly, a trader lacks sufficient capital to maintain the position open. This frequently occurs in highly leveraged deals when the market is erratic.

Most large-cap tokens dropped significantly. Cardano (ADA) and Dogecoin (DOGE) both experienced a 7% decline. BNB, XRP, and Solana (SOL) all had losses of 5% to 6%. The gain from last week was undone by these losses. ETH had increased 40% as a result of the rally. During that period, many altcoins saw double-digit gains.

The spike last week caused short liquidations totaling more than $1 billion. That was the largest amount since 2021. Bitcoin even passed $104,000 for a short time. But the momentum didn’t last. This week’s market reversal shows how quickly sentiment can shift.

U.S.-China Trade News Shifted Market Mood

During U.S. trading hours on Monday, new trade news affected the market. Reports came out that the U.S. and China agreed on a temporary tariff truce. Some tariffs were removed. Both sides also agreed to work on better trade cooperation. While this news helped stocks, it weakened the risk-on mood in crypto.

Coinglass reported that futures open interest across major exchanges dropped over $1.2 billion. This points to a large-scale deleveraging. Many long traders were forced to exit. The drop in open interest shows just how fast traders are adjusting their positions.

Source: X

Some analysts believe this market drop could help reset over-excitement. But traders are now focusing on the U.S. Federal Reserve’s next meeting in June. Jeff Mei, COO at crypto exchange BTSE, shared that macroeconomic trends are currently driving the market. He added that the Fed’s upcoming decision and statements will likely influence Bitcoin’s next move.

Mei also said that a favorable Fed decision could help with lending and investment in the U.S. This could support growth and help avoid a feared recession. Investors are watching closely. The outcome could decide whether Bitcoin can climb past its previous all-time high.

Final Thoughts 

The crypto market’s recent slide shows how fast things can change. Last week’s gains were wiped out in a matter of hours. Long liquidations piled up. Traders are now cautious. With macro factors like the Fed’s decision and global trade news in play, the road ahead remains uncertain.