Crypto Derivatives Liquidations Exceed $600M Following Bitcoin’s Volatile Surge
On May 19, 2025, over $600 million worth of cryptocurrency derivatives positions were liquidated after Bitcoin (BTC) surged past $106,000 only to quickly retrace to around $103,000. The rapid price swings caught both bullish and bearish traders off guard, triggering a cascade of forced liquidations across major futures markets.
The volatility started late Sunday at approximately 21:00 UTC when Bitcoin spiked more than $2,500 within an hour. Analysts attribute the move to a combination of thin weekend liquidity and algorithmic buying triggered at key technical levels. This sharp rally created a textbook short squeeze — where traders betting against Bitcoin were forced to buy back positions, pushing prices even higher before a swift profit-taking followed.
The resulting sell-off wiped out more than $460 million in long positions and $220 million in shorts, affecting futures tied not only to Bitcoin but also to major altcoins including Ether (ETH), Solana (SOL), and Dogecoin (DOGE).
The liquidation event was unusual due to its timing during typically low-activity weekend hours, suggesting the involvement of a significant market participant driving forced buying and selling.
In the 24 hours following the move, prices for SOL, DOGE, and XRP each dropped by over 4%, while the broader CoinDesk 20 (CD20) index declined more than 2%, reflecting the ripple effects across the crypto market.
This surge in volatility comes amid ongoing macroeconomic uncertainty. Moody’s recent downgrade of the U.S. credit rating and renewed inflation concerns following mixed economic data have pressured markets. The downgrade also pushed the yield on the U.S. 30-year Treasury above 5%, adding to investor anxiety.
Although cryptocurrencies have generally seen inflows from institutional investors and gained momentum from spot ETF developments, traders remain wary at these elevated price levels. According to Alex Kuptsikevich of FxPro, Bitcoin’s inability to maintain a position above the key $106,000 mark may indicate resistance in the short term.
Market watchers also expect increased volatility ahead, which could challenge traders employing leveraged positions.
Haiyang Ru, co-CEO of HashKey Business Group, shared via Telegram that investors are rotating capital into Bitcoin amid growing concerns over upcoming U.S. fiscal legislation that may increase national debt and Treasury premiums. However, Ru cautioned that “while Bitcoin hovers near new highs, more volatility is expected as markets anticipate trade deal outcomes and final fiscal policies.”
