Bitcoin Dips Below $104K, Triggering Over $600 Million in Long Liquidations Amid Heightened U.S.-China Trade Tensions
On May 31, Bitcoin slipped under the $104,000 level, sparking a surge of liquidations exceeding $600 million, mostly impacting bullish traders. This marked the largest liquidation event since February, as global markets reacted sharply to renewed trade conflicts between the U.S. and China.
According to Coinglass, liquidations totaled approximately $688 million in the past 24 hours, with nearly 90% coming from long positions. The biggest single liquidation was a $12.25 million BTC/USDT position on OKX. Bitcoin futures liquidations led the downturn with $153 million, followed by Ethereum at $122 million. Altcoins such as Solana, XRP, and Dogecoin also experienced substantial forced sell-offs.
The market turmoil followed U.S. President Donald Trump’s announcement of a 50% tariff increase on Chinese steel and aluminum imports, citing China’s breach of a tariff truce established earlier this month. This move unsettled risk assets, including cryptocurrencies, as it heightened fears of escalating trade tensions.
China responded by calling on the U.S. to reverse its actions and adhere to agreed-upon terms, while most of China’s steel exports were already subject to existing tariffs. Nevertheless, the announcement rattled investors, increasing uncertainty in both traditional and digital markets.
The wider crypto market suffered as Ether dropped close to 4%, XRP and Solana each declined between 4% and 5%, and Dogecoin plummeted over 8%. The sell-off also extended to stock markets and commodities.
Derivatives markets show rising activity, with Bitcoin futures open interest growing 51% since April, and options volume jumping 126%, indicating a growing appetite for leveraged trading. However, large Bitcoin holders have moved into net selling, shifting coins back to exchanges, signaling profit-taking after recent gains.
Experts suggest the massive liquidations could represent a market overreaction, possibly setting the stage for a bounce-back. Still, ongoing geopolitical risks and volatile derivatives markets mean traders should brace for continued price swings in the near term.
