Bitcoin surged past $106,000 by late Sunday before surrendering nearly 4% on Monday morning. More than $670 million in cryptocurrency futures were liquidated during this volatility. Nonetheless, spot BTC exchange-traded funds attracted $608 million last week, hinting at a resilient bid from institutions.

Inside the roller coaster

At 22:00 UTC on May 18, a short-sell pushed Bitcoin up to $106,980, the highest price since February. The price surge lasted less than five hours. By 02:00 UTC, profit-taking and thin weekend liquidity reversed the entire move, pushing the price down to $103,000. Another slide down to $102,300 occurred before bids stabilized the market around breakfast time in London, at approximately $103,200.

CoinGlass data shows the intense back-and-forth caused $670 million in forced liquidations across Bitcoin, Ethereum, Solana, and Dogecoin futures. About $465 million in long positions were wiped out, while $224 million in short positions were squeezed during the initial price surge.

The data highlights how thin trading order books on weekends can amplify any stop-loss cascade, as Sunday witnessed the lowest trading volume of the year for Binance.

While derivatives traders suffered losses, spot Bitcoin ETFs quietly garnered $607 million net in the week ending May 18. BlackRock's iShares Bitcoin Trust accounted for $839 million, offsetting outflows from smaller products.

Corporate treasuries are also participating in the accumulation process. Strategy, a Bitcoin trading software company listed in the United States, revealed the purchase of 13,390 BTC on Monday, spending about $1.3 billion and raising reserves to 568,840 BTC.

At the same time, open interest on exchanges has skyrocketed to a yearly high of $70 billion, indicating that additional leverage is now penetrating the market, similar to the second phase of the 2021 bull run.

A big cloud gathering

Macroeconomic headlines have added to the pressure on the cryptocurrency rally. Moody's has downgraded the outlook on U.S. government debt, pushing 30-year Treasury yields back above 5% and raising concerns about financial risk.

Analysts at the research firm Block Scholes told Reuters,

"The recent price volatility may have begun to prove the point that Bitcoin is not just the 501st company in the SPX."

Martin Leinweber from MarketVector Indexes added,

"Damage has occurred in terms of confidence in dollar-denominated assets and the U.S.... but you can't (diversify) overnight."

The CEO of Stocktwits added on X,

You're witnessing a political-economic restructuring, in which Bitcoin is the pressure valve.

Trump, tariffs, the chaos of the Treasury Department, all part of the change.

Why it matters

  • Sentiment barometer: Every survey above $100,000 provides a real-time measure of risk appetite following the halving event in April.

  • Structural momentum: ETF capital flows in and corporate balance sheet exposure create buying reflexes when prices dip, potentially reducing retracements.

  • Liquidity minefield: Weekend trading remains a danger zone for leveraged players, with thin order books amplifying both squeezes and crashes.

What to watch next

  1. Whether spot ETF capital flows maintain above $500 million per week, a slowdown could test support levels around $100,000.

  2. Open interest is rising in perpetual futures contracts. Increased leverage could set the stage for another squeeze.

  3. Other U.S. financial headlines. New stress in the bond market could amplify volatility in risk assets.