Crypto Markets Lose $530M as Trade Tensions Ease

A sharp decline in cryptocurrency markets late Monday resulted in over $500 million in long liquidations, wiping out earlier gains as bitcoin (BTC) retreated from its weekend highs. Traders responded to the de-escalating U.S.-China trade tensions, which had initially boosted market sentiment.

Data from Coinglass indicates that more than $530 million worth of long positions were liquidated in the past 24 hours. Nearly $200 million of these liquidations came from bitcoin-tracked futures, and $170 million from ether (ETH) products. Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to insufficient margin, typically when a trader cannot meet the margin requirements for a leveraged position.

Major cryptocurrencies bore the brunt of the drop, with dogecoin (DOGE) and cardano (ADA) each falling as much as 7%. Solana (SOL), XRP, and BNB Chain’s BNB also experienced significant declines, losing between 5%–6%.

This reversal marked a shift from last week’s euphoric rally, during which ETH gained 40% and major altcoins saw double-digit percentage gains in a wave of short squeezes. That move had triggered over $1 billion in short liquidations, the highest since 2021, and briefly sent bitcoin past $104,000 before momentum faded.

Markets turned lower during U.S. trading hours Monday after reports of a temporary tariff truce between the U.S. and China. The removal of several mutual levies and pledges of renewed trade cooperation supported equities but may have tempered the risk-on narrative that had fueled crypto’s breakout over the past week.

Futures open interest across major exchanges also fell by more than $1.2 billion, suggesting a sharp deleveraging as long traders were forced to exit positions. Analysts caution that while the near-term flush may reset frothy sentiment, the next Fed meeting in June will likely be a key factor in driving Bitcoin past its previous all-time high.

“Right now macro concerns are driving the market and the next Fed decision and outlook remarks in June will likely be the key factor in driving Bitcoin past its previous all-time high,” said Jeff Mei, COO at a crypto exchange. “This would stimulate lending and investment in the US economy and hopefully drive growth, avoiding the recession investors are apprehensive about.”