Hodl on, because the crypto market just took a wild ride. CoinGlass data shows that over $530 million worth of long positions were liquidated in the last 24 hours. Nearly $200 million of that came from Bitcoin futures, and about $170 million from Ethereum (ETH) products. Ouch.
For those new to the liquidation game, it happens when an exchange forcibly closes a trader's leveraged position because they can't meet the margin requirements. In other words, the trader runs out of money to keep the trade going. Better luck next time, folks.
Altcoins Get a Beating as Major Tokens Fall
Major coins were hit hard in this latest dip, with Dogecoin (DOGE) and Cardano (ADA) each dropping as much as 7%. Solana (SOL), XRP (XRP), and Binance Coin (BNB) weren't far behind, falling 5%-6%. Looks like the crypto market took a big ol' hit after last week’s euphoric rally, where Ethereum gained 40% and major altcoins posted double-digit gains. At that time, we saw over $1 billion in short liquidations, the highest since 2021, and Bitcoin even managed to briefly touch $104,000 before momentum fizzled out. A rollercoaster, to say the least.
U.S.-China Truce and Fed Focus Send Markets Lower
So, what triggered the shift? It seems the crypto market lost steam during U.S. trading hours on Monday after news broke about a temporary U.S.-China tariff truce. The U.S. and China agreed to remove some tariffs and renew trade cooperation. While this helped boost equities, it put a damper on the "risk-on" vibe that had been driving crypto’s recent breakout.
And it doesn’t stop there. Futures open interest across major exchanges dropped by over $1.2 billion, signaling a sharp deleveraging as long traders scrambled to exit their positions. CoinGlass data points to this as a sign that traders are running for cover.
The Fed's Next Move Could Be a Game Changer
Analysts are now keeping a close eye on macroeconomic factors, particularly the next Federal Reserve meeting in June. Jeff Mei, COO at BTSE, a crypto exchange, shared his thoughts:
"The next Fed decision and outlook remarks in June will likely be the key factor in driving Bitcoin past its previous all-time high."
If the Fed pumps up lending and investment, it could help avoid a recession and spark growth. Investors are watching and hoping for some good news to jumpstart the market.
In the meantime, it looks like we’re in for a bit of a wait as the markets recalibrate. Here’s hoping the Fed delivers the goods next month!
HODL Team
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