A late-day selloff in the cryptocurrency markets on Monday reversed earlier gains, resulting in $530 million in long liquidations, as a temporary truce between the U.S. and China raised uncertainty for risk assets.
After surging to near $106,000 early on Monday, Bitcoin (BTC) dropped to $101,300, marking a 3% decline in the last 24 hours. The pullback was triggered by news that the U.S. and China had agreed to pause most tariffs for the next 90 days, which helped global equity markets rally but dampened some of the “risk-on” sentiment that had driven cryptocurrencies higher.
According to Coinglass data, $200 million in Bitcoin futures and $170 million in Ethereum (ETH) positions were liquidated. Other major altcoins followed suit, with Dogecoin (DOGE) and Cardano (ADA) dropping 7%, while Solana (SOL), XRP, and BNB saw losses between 5% and 6%.
The mass liquidations marked a stark reversal from the previous week’s crypto rally, where ETH posted a 40% gain and Bitcoin briefly broke past $104,000 amid a wave of short squeezes. That surge had led to $1 billion in short liquidations, the highest total since 2021.
However, Monday’s developments suggest that while the easing of trade tensions boosted traditional equities, the news may have signaled a shift in sentiment for the cryptocurrency markets, which had been enjoying a week of strong momentum.
With futures open interest across major exchanges dropping by $1.2 billion, analysts suggest the market is experiencing a deleveraging phase, forcing many leveraged traders to exit positions.
“Looking ahead, market focus will turn to the Federal Reserve’s upcoming decisions in June,” said Jeff Mei, COO at crypto exchange BTSE. “Any indication of changes to interest rates or liquidity policy could have a significant impact on Bitcoin’s next move.”
As the market digests these developments, traders are likely to watch closely for further signs of macroeconomic stability or volatility that could shape crypto’s trajectory in the short term.
