Key Points:
- The cryptocurrency market witnessed more than $500 million in long liquidations as Bitcoin’s price retreated from its weekend peak.
- Recent agreements on tariffs between the U.S. and China may have dampened the enthusiasm in crypto trading.
- Analysts are keeping an eye on the Federal Reserve’s June meeting for insights into potential market shifts.
A sudden decline in cryptocurrency prices late Monday resulted in over $500 million in liquidations, reversing gains achieved previously as Bitcoin (BTC) fell from its weekend highs amidst U.S.-China trade tensions reducing.
According to Coinglass data, over $530 million worth of long positions were liquidated in the last 24 hours—nearly $200 million linked to Bitcoin futures and about $170 million from Ethereum (ETH) products. Liquidations occur when exchanges forcibly close leveraged trade positions due to a lack of sufficient margin.
Major cryptocurrencies faced significant drops, with Dogecoin (DOGE) and Cardano (ADA) each diminishing around 7%, while Solana (SOL), XRP (XRP), and Binance Coin (BNB) followed suit with losses between 5%-6%.
The recent liquidations mark a contrast to last week’s rally, where ETH surged by 40%, prompting substantial short liquidations exceeding $1 billion—the highest since 2021—allowing Bitcoin to briefly surpass $104,000.
Trading experienced a downturn during U.S. hours following reports of a temporary tariff truce between the U.S. and China, which included the lifting of several reciprocal levies and pledges for renewed trade cooperation. While this improved sentiment in equities, it possibly slowed the momentum driving the recent crypto rally.
Open interest in futures across major exchanges fell by more than $1.2 billion, indicating a rapid deleveraging as long traders exited their positions, according to Coinglass.
Analysts caution that while the recent market flush may reset overly optimistic sentiment, attention will turn to the upcoming Federal Reserve meeting in June for its potential influence on Bitcoin reaching its previous all-time high.
“Currently, macro factors are steering the market, and the Fed’s upcoming decisions will likely play a pivotal role in pushing Bitcoin beyond its prior peaks,” said Jeff Mei, COO of BTSE, in a conversation via Telegram.
“This could foster lending and investments in the U.S. economy, promoting growth and mitigating recession concerns among investors,” he added.
