The cryptocurrency market experienced a significant downturn following a promising start to the week.
A sharp retracement on Monday night halted Bitcoin’s momentum gained over the weekend. According to Coinglass, over $530 million in long positions were liquidated within the last 24 hours, causing panic among traders. The decline in major altcoins further compounded the uncertainty in the market environment.
Scale of Position Liquidations and Losses
Bitcoin
$ 102,440 futures witnessed liquidations amounting to approximately $200 million. In Ether products, liquidations surpassed $170 million. For investors using leverage, insufficient collateral led to automatic closure of positions, exacerbating the downturn’s severity. Dogecoin
$ 0.223125 and Cardano
$ 0.789685 were hit the hardest with declines up to 7%, while Solana
$ 171, XRP, and BNB fell by an average of 5–6%. For those who were caught in last week’s surge, such a swift correction came as a surprise. During a period when Ethereum
$ 2,452 achieved a 40% gain, liquidations on short positions soared past $1 billion, with Bitcoin temporarily testing $104,000.
On Monday, the total open positions in futures on exchanges decreased by $1.2 billion. This steep decline indicates that investors had to exit riskier trades. Instant fluctuations posed a significant challenge to those not cautious in their capital management.
Impact of Macro Developments on the Market
On Monday, a temporary tariff agreement between the U.S. and China dampened risk appetite. Declarations by both parties to lower tariffs weakened the risky investment theme that fueled recent climbs. The wave of sales observed in U.S. markets rapidly echoed in the cryptocurrency market. Experts point out that macroeconomic concerns resurfaced ahead of the U.S. Federal Reserve’s (Fed) June meeting. The Fed’s interest rate policy and forthcoming messages could directly influence Bitcoin’s potential to surpass previous peaks. BTSE Crypto Exchange Operations Director Jeff Mei suggests that credit conditions and investment appetite will shape according to Fed decisions. Experts argue that moving from excessive optimism to measured expectations could contribute to market balance. Indeed, the liquidations served as a reminder to many investors about the high level of short-term volatility.