5 billion Dollar long positions liquidated due to Bitcoin's plummet──DOGE and ADA down 7% | CoinDesk JAPAN

• In the cryptocurrency market, the decline of Bitcoin from its weekend high caused the liquidation of long positions exceeding 500 million Dollars.
• The temporary tariff agreement between the United States and China may have eased the risk-on mood in the cryptocurrency market.
• Analysts are paying attention to the Federal Reserve Board (FRB) meeting in June as a factor influencing future market trends.

On the night of May 12, a sudden downward movement occurred in the cryptocurrency market, leading to the liquidation of long positions exceeding $500 million (approximately 75 billion yen, based on an exchange rate of 150 yen per Dollar). Bitcoin (BTC) fell from its weekend highs, and traders reacted to the easing of US-China trade tensions, resulting in the loss of previous profits.

According to Coinglass data, over $530 million (approximately 79.5 billion yen) in long positions have been liquidated in the past 24 hours, of which nearly $200 million (approximately 30 billion yen) came from Bitcoin-linked futures, and $170 million (approximately 25.5 billion yen) from Ethereum (ETH) related products.

Liquidation refers to the act of the exchange forcibly closing a trader's leveraged position due to a loss of part or all of the trader's initial margin. This occurs when the trader cannot meet the margin requirements for their leveraged position (i.e., does not have sufficient funds to continue trading).

Major cryptocurrencies are facing downward movement, with Dogecoin (DOGE) and Cardano (ADA) dropping by up to 7% each, while Solana (SOL), XRP, and Binance Coin (BNB) fell by 5-6%.

This liquidation occurred after the fervent rise last week, where ETH rose by 40% and major altcoins also recorded double-digit increases due to a short squeeze wave. During this rise, over 1 billion Dollars (approximately 150 billion Yen) in short liquidations occurred, marking the highest amount since 2021. Before the momentum waned, Bitcoin temporarily surpassed 104,000 Dollars.

Subsequently, during the American trading hours on the 12th, there were reports that the United States and China had agreed to a temporary ceasefire in the trade war, which included the removal of multiple reciprocal tariffs and a resumption of trade cooperation, causing the market to turn downward.

The easing of tensions supported the stock market, but this movement may have suddenly cooled the risk-on mood that had propelled last week's surge in cryptocurrency assets.

According to Coinglass data, the futures open interest on major options exchanges has decreased by over 1.2 billion Dollars (approximately 180 billion yen), indicating a sharp liquidation of leverage as long position investors have been forced to liquidate their positions.

Analysts are warning that short-term adjustments could reset the overheated sentiment while closely watching the next meeting of the U.S. Federal Reserve (FRB) in June.

Jeff Mei, COO of cryptocurrency exchange BTSE, stated in a Telegram message to CoinDesk that "Currently, concerns about the macroeconomy are driving the market, and the Federal Reserve's interest rate decisions and outlook statements in June will be key factors in determining whether Bitcoin will reach new highs."

"If that happens, lending and investment in the American economy will be stimulated, allowing investors to avoid concerns about a recession and promoting growth," added Mr. May.