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Key Insights:
- Over $600M in long positions liquidated in 24 hours as Bitcoin and altcoins plunge sharply.
- China bans crypto ownership, while Thailand charges exchanges operating without a license.
- Spot Bitcoin ETFs see net outflows of $358M, ending a strong 10-day inflow streak.
The global crypto market is in a sharp downturn as long liquidations and regulatory crackdowns hit hard. Investor sentiment was shaken, and asset exits accelerated as the total market cap fell by 4.6% to $3.45 Trillion.
At the same time, selling pressure was fuelled by tightening rules from China and Thailand. All crypto markets are being squeezed on multiple fronts, with stalled trade talks and ETF outflows.
Crypto Market Selloff Deepens as Liquidations Surge and ETFs Bleed
In the last 24 hours, a sharp crypto market correction wiped out $600 Million in long positions. The largest liquidations were seen in Bitcoin, with $207.9 Million, and Ethereum, with $107.9 Million.
The price levels breaking key support zones forced these liquidations and added momentum to the selloff.
Trading volume rose across major exchanges alongside the liquidations. Bitcoin’s daily volume surged almost 30% to $128 Billion, while XRP volume spiked over 33% in panic trading. Even then, prices dove, with Bitcoin down 1.94% to $105,692 and Ethereum down 3.53% to $2,625.
SoSoValue Data suggests that Spot Bitcoin ETFs saw $358.6 Million in net outflows, ending their 10-day inflow streak. This added to market pressure, reflecting a shift in investor sentiment.
The biggest capital exit was from Fidelity’s FBTC at $166 Million, followed by Grayscale’s GBTC at $107 Million. BlackRock’s IBIT was the only fund to register positive flow at $125 million, a sign of a sharp institutional pullback.
China’s Crypto Ban and Thailand’s Legal Crackdown Add to Bearish Sentiment
This week, regulatory risks in the crypto market surged as China announced a new ban on holding cryptocurrencies. The new policy went further, prohibiting retail and institutional holders from owning the tokens.
Bitcoin immediately dropped on the announcement, and altcoins continued to lose. At the same time, Thailand’s Securities and Exchange Commission filed legal action against five unlicensed crypto platforms.
The regulator accused them of violating the Digital Asset Business Act and warned investors to take their funds before shutdowns.
The developments have fanned fears of further global crackdowns on digital asset markets. In response to the Thai SEC notice, OKX said it remains committed to compliance and will cooperate with local authorities.
But investor confidence has already been dented and sentiment has become defensive, with funds moving into stable assets. The only category in the green today was stablecoins, which gained 0.19%.
Macroeconomic Tensions and Technical Weakness Deepen the Crypto Market Decline
The U.S.-China trade negotiations have stalled again, Treasury Secretary Bessent stated. The bearish backdrop continues to impact global markets, including the crypto market.
Direct engagement from top leadership is now required to break the deadlock. There are expectations that the president will step in during the coming weeks.
Meanwhile, the U.S. appeals court reinstated previously ruled illegal tariffs, stoking new worries in global markets. Asian stock markets reversed earlier session gains as this uncertainty spilled over into them.
That risk-off mood spread quickly to digital assets, forcing investors to unwind risky positions. The most affected categories were Meme tokens, GameFi, and L2, which fell 5.55%, 5.64%, and 6.11%.
On the technical side, Bitcoin’s cumulative net taker volume went deeply negative around May 24, a sign of selling dominance.
The metric fell as low as -$1.3 Billion as buyers couldn’t hold above $106,000. Funding rates were still slightly positive for BTC and ETH, indicating some long interest, but overall open interest was down.
As an example, open interest on DOGE fell 10.79%, XRP dropped 10.17%, and ETH fell 6.02%. Traders are reducing risk by scaling back leveraged positions.
They are cutting exposure to potential sudden downturns. Altcoins with favorable funding rates like SUI and BTC couldn’t hold onto gains during the broader pullback.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only. And they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
