Monday's late-day crypto market correction spurred over $500 million in long liquidations, erasing earlier gains as Bitcoin (BTC) retreated from weekend highs. Traders reacted to easing U.S.-China trade tensions, with major altcoins like Dogecoin (DOGE) and Cardano (ADA) dropping 7%.
Market Liquidation Wave
Coinglass data reveals:
- $530M+ in long positions liquidated past 24 hours
- $200M from BTC-tracked futures
- $170M from Ethereum (ETH) products
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Liquidations occur when exchanges force-close leveraged positions due to insufficient margin. This happens when traders lack funds to maintain open trades.
Altcoin Performance
Top movers included:
- DOGE & ADA: -7%
- SOL, XRP, BNB: -5% to -6%
This reversal followed last week’s rally, where ETH surged 40% and altcoins posted double-digit gains amid a short squeeze. Bitcoin briefly topped $104,000 before momentum faded.
Trade Tensions Impact
U.S. trading sessions saw declines after reports of a U.S.-China tariff truce:
- Mutual tariff cancellations
- Pledged trade cooperation
While equities gained, the development softened the risk-on sentiment that fueled crypto’s rally.
Market Indicators
- $1.2B+ drop in futures open interest (Coinglass)
- Sharp deleveraging as positions unwound
Fed Focus Ahead
Analysts warn macro concerns dominate, with June’s Federal Reserve meeting pivotal.
Jeff Mei, BTSE COO, noted:
"Fed’s June decision and outlook could determine Bitcoin’s breakout beyond prior highs. Stimulating U.S. loans/investments may avert feared recession."
FAQ
Q: Why did crypto prices drop suddenly?
A: Profit-taking after last week’s rally, combined with reduced trade tensions, cooled risk appetite.
Q: How are liquidations calculated?
A: Exclosures close positions automatically when margin balances can’t cover losses.
Q: Will Bitcoin recover soon?
A: Market sentiment hinges on Fed policy signals and macroeconomic stability.
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