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Crypto Traders Betting on Price Growth Lost $563 Million Due to Liquidations
Crypto bulls preparing for rising prices experienced their worst day in more than three months as market leaders Bitcoin and Ethereum (ETH) fell amid macroeconomic concerns.
According to data from Coinglass, exchanges liquidated $563,000,000 in leveraged bullish futures bets over the past 24 hours, marking the largest one-day collapse since February 6, when BTC crashed close to $60,000 and liquidated $1,840,000,000 in bullish positions.
Liquidations of short positions, or bearish bets, totaled only $65,000,000 during the same period, showing how unbalanced positioning had become.
The main удар was on Ethereum, the second-largest token by market capitalization, which accounted for $244,000,000 of the liquidated long positions. It was followed by Bitcoin with $160,000,000.
Together, these two tokens represented the majority of the broader market collapse that wiped out bullish leverage.
Bullish futures bets worth $563,000,000 were liquidated over 24 hours. Source: Coinglass.
Exchanges liquidate positions when a trader’s bet becomes so unprofitable that the funds deposited as collateral no longer cover the losses.
In futures trading, traders can bet on price increases or decreases by depositing only part of the total trade value as collateral. The exchange covers the remaining amount.
If the market moves in the expected direction, profits increase. But if the market moves against the trader’s position, losses rise just as quickly and often become large enough to completely wipe out the deposit.
In such cases, the exchange intervenes to close or liquidate the position.
That is exactly what happened to long positions when Bitcoin and Ethereum fell, dragging down the broader market.
Bitcoin is currently down 5% to $77,400 for the week ending May 17 and has continued declining since then, trading slightly below $77,000.
Ethereum fell 10% to $2,129, where it was trading at the time of publication.
These losses are likely linked to higher-than-expected US inflation data released last week and the resulting rise in Treasury yields.
Bond yields have also been rising across other developed economies, reducing the attractiveness of holding higher-risk zero-yield assets such as Bitcoin.
These macroeconomic concerns emerged just as the Senate Banking Committee approved the Clarity Act on Thursday — a long-awaited bill designed to establish a comprehensive framework for digital assets in the United States, bringing it one step closer to a full Senate vote.
This episode serves as a reminder that macroeconomic factors can outweigh crypto-specific bullish catalysts.
While regulatory progress remains an important catalyst, it cannot always protect leveraged traders from rising bond yields and inflation concerns that reduce risk appetite across all asset classes.
See also: "Traders Are Moving Into Stablecoins and Not Returning. What’s Happening?"
