A wave of panic-driven selling swept through the cryptocurrency market over the past 24 hours, triggering nearly $1 billion in liquidations and underscoring just how brittle sentiment remains in the face of macroeconomic and political shocks.
According to data compiled by Coinglass, more than $980 million in leveraged positions were liquidated in the span of a single day, with long positions accounting for over $876 million of the total. The data shows that over 223,000 traders were affected, although the true magnitude could be even higher, as the figures are drawn from publicly available sources and may not capture the full scope of losses across all platforms.
A Fragile Market Meets Political Turbulence
At the center of the market’s swift downturn was an unexpected and very public fallout between President Donald Trump and Tesla CEO Elon Musk, whose online spat over tax and spending policies sparked concern among investors already grappling with a volatile macroeconomic environment.
Musk’s blunt criticism of Trump’s new economic bill — which he labeled a "disgusting abomination" — ignited speculation over political instability and its potential ripple effects. Combined with renewed fears over escalating tariffs, the incident proved too much for a market heavily skewed toward leveraged optimism.
“The market was already stretched, and this added shock created a cascading effect,” said Vincent Liu, Chief Investment Officer at Kronos Research. “When sentiment is this fragile and leverage this high, even a modest trigger can cause massive liquidations through automatic sell-offs.”
Bitcoin, Ether Hit Hard
The brunt of the liquidations hit Bitcoin and Ether, the two largest cryptocurrencies by market cap. Bitcoin alone saw $341.7 million in liquidated positions, with the overwhelming majority — roughly 90% — coming from long trades. Ether was close behind with $285.6 million in liquidations. Other popular tokens like Solana (SOL), XRP, and Dogecoin (DOGE) also experienced substantial sell-offs.
Bitcoin, which had recently been consolidating near $105,000 after briefly surpassing $111,800, slid sharply to touch lows near $100,000 before stabilizing. At the time of publication, BTC had recovered slightly to around $103,333, according to The Block’s price tracker.
“Bitcoin was already on shaky technical ground, hovering near key support after failing to hold recent highs,” noted Nick Ruck, Director at LVRG Research. “This political rift poured fuel on the fire, spooking traders into closing positions, especially those riding on margin.”
Liquidation Chain Reactions
The crypto market’s tendency toward cascading liquidations — where falling prices trigger automatic position closures that, in turn, drive prices lower — was on full display. Analysts point to excessive leverage as a core structural vulnerability. In bullish phases, margin amplifies gains. But in moments of stress, it turns corrections into flash crashes.
“The system isn’t designed to absorb political drama gracefully,” said Liu. “Automated risk engines start liquidating, and it quickly turns into a stampede.”
Indeed, the liquidation event served as a stark reminder that, despite increasing institutional involvement and technological sophistication, the crypto market remains highly sensitive to external shocks — especially when traders are overexposed.
Market Eyes Next Macro Moves
Looking ahead, market participants are now focusing on key U.S. economic data releases, starting with Friday’s employment report and followed by the Consumer Price Index (CPI) data due on June 11. These releases are widely expected to influence the Federal Reserve’s next steps on interest rates and will likely dictate near-term price action.
“Right now, everything depends on macro developments,” Liu said. “U.S.–China trade tensions, strength of the U.S. dollar, and capital flows from institutional investors are all critical signals. The market is in a fragile state, and until leverage resets, we could see continued volatility.”
Despite the sell-off, some analysts believe this reset could ultimately prove healthy. By shaking out excess leverage and forcing risk management discipline, the market may be better positioned for sustainable growth — provided macro conditions don't worsen further.
Conclusion
The past 24 hours have been a harsh reminder of crypto’s volatility when caught in the crosshairs of politics and economic uncertainty. Nearly $1 billion in liquidations — mostly from bullish bets gone wrong — highlights how quickly sentiment can sour. With influential voices like Trump and Musk stirring the pot, and macro data looming, traders will need to tread carefully in the days ahead.
