The crypto market faced a brutal shakeout as over $1 billion in leveraged positions were liquidated in the past 24 hours, triggered by a sudden Bitcoin price drop, macroeconomic concerns, and upcoming financial data releases. The downturn saw major cryptocurrencies tumble, with traders bracing for a volatile end to the week.
Bitcoin Drops Below $101K Amid Market Turmoil
Bitcoin’s price plunged nearly 5% to a low of $100,372, marking a 10% correction from its recent all-time high. The fall came in the wake of several converging factors: liquidation of high-leverage trades, macroeconomic pressure, and an unexpected social media feud between Elon Musk and Donald Trump, which spooked market sentiment. Despite a modest rebound to around $102,400, the crypto community remains on edge ahead of the options expiry and key U.S. jobs data.
Top altcoins including Ethereum (ETH), XRP, Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Hype (HYPE), and Sui (SUI) also nosedived, following Bitcoin’s lead and erasing recent gains. Market watchers are now closely observing whether investor interest will sustain the dip-buying momentum or if further declines are imminent.
Over $1 Billion in Crypto Positions Liquidated
According to CoinGlass, crypto liquidations soared past $1 billion, affecting more than 227,000 traders. Of this, over $900 million were long positions, a clear sign of overleveraged bets collapsing under pressure. The sharp price reversal caused massive stop-outs, triggering a cascade of liquidations across major exchanges.
The largest single liquidation, a $10 million XBTUSD order, occurred on BitMEX. Bitcoin and Ethereum alone contributed more than $600 million in liquidations. CoinGlass also highlighted that this was the biggest long liquidation event since February 25, wiping out countless high-risk traders.
One notable example was trader James Wynn, who lost 155.38 BTC worth $16.14 million due to overleveraged long exposure. Following the loss, Wynn reportedly closed all open long positions, underscoring the unforgiving nature of crypto leverage.
Options Expiry to Steer Market Direction
With $3.8 billion in Bitcoin and Ethereum options set to expire on Deribit at 8:00 UTC, traders are eyeing the next move with caution. The expiry includes 30,000 BTC options worth $3.21 billion, with a put-call ratio of 0.70. The max pain point, the price level at which the most options expire worthless is set at $105,000, indicating current market levels are significantly under water.
In addition, 242,584 Ethereum options valued at $588 million are also expiring. ETH’s put-call ratio stands at 0.63, with a max pain point at $2,575. These expiries are likely to inject more volatility, particularly if large-scale repositioning occurs post-expiry.
However, signs of stabilisation are visible in the futures market. Both BTC and ETH futures open interest climbed in the last four hours by 0.80% and 1.74% respectively, suggesting a tentative recovery in sentiment, possibly driven by bargain hunting.
US Jobs Data Could Hold the Key
Beyond crypto-specific triggers, macroeconomic factors loom large. The US 10-year Treasury yield stabilised around 4.39%, and the US Dollar Index (DXY) hovered near 98.8, as markets await the May nonfarm payrolls report.
The jobs data, set to be released by the U.S. Bureau of Labor Statistics later today, is forecasted to show an increase of 130,000 jobs, the weakest in three months with unemployment expected to remain at 4.2%. A softer-than-expected report could increase the likelihood of an early interest rate cut by the Federal Reserve, currently priced at a 54% chance for September according to CME FedWatch.
Former President Trump has ramped up calls for rate cuts, but Fed officials continue to adopt a cautious tone, citing ongoing uncertainty in trade and global economic conditions. For crypto, a dovish Fed outlook could renew risk appetite, potentially sparking a recovery rally across digital assets.
Cautious Optimism or Continued Volatility?
While crypto markets are showing early signs of rebound post-liquidation, the short-term outlook hinges on Friday’s key events. Traders are advised to remain vigilant, as a combination of expired options, macroeconomic uncertainty, and sensitive price levels could trigger further volatility.
For now, Bitcoin clings above $102K, with eyes set on whether it can reclaim the $105K mark or if the market heads lower in search of firmer footing.
