Fears of a deeper crypto market crash intensified on Thursday after more than $1 billion in leveraged positions were liquidated within 24 hours. Bitcoin, Ethereum and XRP traders suffered significant losses as volatility surged ahead of the latest US PCE inflation report.
Market sentiment was also pressured by a major Bitcoin options expiry, declining institutional demand and a sharp drop in Strategy shares.
Crypto Liquidations Exceed $1 Billion
According to CoinGlass data, approximately $1 billion in cryptocurrency positions were liquidated during the past 24 hours, affecting more than 176,000 traders.
Long positions accounted for the majority of the losses, with around $780 million liquidated. Short-position liquidations reached approximately $220 million.
Bitcoin recorded the largest amount of forced liquidations at roughly $415.8 million. Ethereum followed with $230.3 million, while XRP liquidations reached about $14.2 million.
The scale of the liquidation event added further selling pressure to an already fragile crypto market.
Bitcoin, Ethereum and XRP Prices Remain Under Pressure
At the time of reporting, Bitcoin was trading near $61,691 after falling 1.57% over the previous 24 hours.
Ethereum declined by 1.14% to approximately $1,651, while XRP dropped 1.75% to around $1.08.
Traders are also preparing for the expiry of nearly $10 billion in Bitcoin options on Deribit. Many of these contracts were opened when Bitcoin traded at significantly higher levels.
With the cryptocurrency now below several important strike prices, traders may be forced to adjust their positions or increase their downside protection.
Crowded XRP Long Positions Increase Liquidation Risks
XRP futures data showed that traders on Binance maintained a long-to-short ratio of 2.57. The ratio on OKX stood at approximately 2.66.
These figures suggest that bullish traders continue to expect an XRP price recovery. However, heavily concentrated long positions can create additional risks during periods of high volatility.
Should selling pressure increase, another round of forced liquidations could push cryptocurrency prices even lower.
Bitcoin ETF Outflows Signal Weak Institutional Demand
Institutional demand for Bitcoin has also weakened considerably.
US spot Bitcoin exchange-traded funds reportedly recorded around $6.4 billion in net withdrawals over the previous 30 days. This represented the largest monthly redemption recorded by the Bitcoin ETF market.
Continued ETF outflows could limit Bitcoin’s ability to recover, particularly if retail and institutional investors remain cautious.
Strategy Stock Decline Adds to Crypto Market Anxiety
The recent sell-off in Strategy shares has created another source of concern for cryptocurrency investors.
Strategy’s stock price fell below $100 following a 9.26% decline. The drop contributed to negative market sentiment as Bitcoin briefly traded below $60,000 on Wednesday.
Because Strategy holds a substantial amount of Bitcoin, weakness in its shares is often closely monitored by crypto traders.
Prediction markets have also become increasingly bearish. Current estimates place the probability of Bitcoin falling below $50,000 at 64%. The likelihood of a decline below $45,000 has reportedly risen to 46%.
US PCE Inflation Data Could Determine the Next Move
Investors are closely watching the latest US Personal Consumption Expenditures inflation report. The PCE index is the Federal Reserve’s preferred measure of inflation.
Economists expect headline PCE inflation to rise by 0.5% in May, compared with a 0.4% increase in April. Annual inflation is forecast to accelerate from 3.8% to 4.1%.
Core PCE inflation, which excludes volatile food and energy prices, is expected to increase by 0.3% on a monthly basis and 3.4% annually.
A stronger-than-expected inflation reading could encourage the Federal Reserve to keep interest rates higher for longer. Such an outcome could place additional pressure on cryptocurrencies and other risk-sensitive assets.
Market concerns increased after Bank of America analysts revised their outlook and projected three interest rate increases during the year. This represented a major change from previous expectations that the Federal Reserve would keep rates unchanged.
Bitcoin Tests the Crucial $59,000 Support Level
Bitcoin recently approached the important $59,000 support zone before staging a limited recovery.
Crypto analyst Ted Pillows noted that the rebound appeared to be driven mainly by short sellers closing their positions rather than by strong spot-market demand.
A sustained recovery may require Bitcoin to reclaim the $65,000 level with support from genuine buying activity.
Immediate resistance is located near $64,200, followed by another supply zone around $66,600. A more significant resistance level remains near $70,600.
On the downside, failure to hold the $59,000 support area could expose Bitcoin to further losses. The next potential support levels are estimated at approximately $56,500 and $55,100.
Bitcoin’s direction may now depend heavily on the PCE inflation results, institutional demand and whether buyers return to the spot market.
