Crypto Liquidations Hit $563 Million as Bitcoin and Ether Drop on Macro Pressure

Leverage Flush Hits Traders Betting on Market Rally

Crypto traders betting on a market recovery suffered heavy losses as $563 million in long positions were liquidated in the past 24 hours. The sharp wipeout marks the largest single day liquidation event in more than three months, according to Coinglass data, as both Bitcoin and Ether fell under broader economic pressure.

Ether led the losses with about $244 million in long liquidations, while Bitcoin followed with roughly $160 million. Short positions saw far smaller liquidations at around $65 million, showing how heavily traders were positioned for upside before the drop.

Bitcoin and Ether Decline on Inflation and Yield Concerns

Bitcoin fell about 5% to $77,400 during the week ending May 17 and continued sliding below $77,000. Ether also dropped nearly 10%, trading around $2,129. The downturn was driven by renewed macroeconomic concerns, including hotter than expected inflation data and rising U.S. Treasury yields.

Higher bond yields in the U.S. and other major economies have reduced appetite for risk assets like cryptocurrencies. Investors are shifting toward safer yield-bearing instruments, putting pressure on leveraged crypto positions across the market.

Futures Market Mechanism Amplifies Losses

Liquidations occur when traders using borrowed funds cannot maintain margin requirements, forcing exchanges to close positions automatically. This mechanism amplified the sell-off as falling prices triggered more forced exits, accelerating downside momentum.

Macro Risks Outweigh Crypto Catalysts

The sell-off came even as the U.S. Clarity Act moved closer to a Senate vote after clearing a key committee. However, analysts note that regulatory progress was not enough to offset macro pressures, with inflation fears and rising yields continuing to dominate crypto market direction.