Crypto market sees surge in long liquidations as altcoins suffer steep losses

The cryptocurrency market has faced a turbulent 24 hours, with a significant spike in long liquidations and broad declines across major altcoins.

Total cryptocurrency liquidations reached $328.45 million over the past day, with $262.41 million of long positions wiped out across major centralized exchanges, according to Coinglass data .

Short liquidations, by comparison, amounted to $66.04 million, underscoring the dominance of bearish sentiment.

Altcoins under pressure

Leading altcoins bore much of the brunt of the current sell-off. Ethereum declined by 5% in the past 24 hours and is now down more than 14% over the past week. Solana also fell by over 5% on the day and nearly 17% over the week, while Cardano dropped by more than 7% in the past 24 hours and almost 16% over the week, according to The Block’s Prices Page .

Bitcoin has performed relatively more robustly, posting a 2% decline over the past day and a 6% drop over the week. One analyst suggested that this relative stability may be tied to increased institutional interest in bitcoin and its status as a leading asset in times of market uncertainty. "There are expectations for bitcoin ETF outflows to reverse, continued corporate purchases, and a decreasing unemployment rate, so we foresee a positive outlook for the digital asset in the coming days," BRN analyst Valentin Fournier told The Block.

Bitcoin dominance, a metric that tracks the digital asset's share of the overall crypto market capitalization, has been on an upward trend, rising to 54.8%, with Ethereum dominance seeing a decline to 11.3%, suggesting that bitcoin is gaining preferential treatment amid the current market turbulence. 

However, short-term bitcoin investor sentiment appears fragile. The Short-Term Spent Output Profit Ratio (SOPR), which measures the profitability of short-term bitcoin holders, is at 0.987, indicating that this cohort is selling at a loss, according to CryptoQuant data .

Despite this weakness, analysts see potential upside in the current sell-off. CryptoQuant notes that historical patterns show that markets often rebound after short-term investors capitulate. If bitcoin’s price declines further, long-term holders, who typically view such conditions as buying opportunities, may step in to accumulate coins sold cheaply by short-term traders, the CryptoQuant analysts added.

Macro headwinds and implications for the bitcoin market

The macroeconomic environment continues to weigh heavily on risk assets, including cryptocurrencies. Rising U.S. Treasury yields and a strengthening U.S. dollar are contributing to investor expectations of tighter financial conditions throughout 2025. The U.S. 10-year Treasury yield remains elevated at 4.89%, while the Dollar Index (DXY) has climbed above 110, levels not seen since 2022.

This week’s upcoming U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data releases will be closely watched. A hotter-than-expected inflation print could dampen risk appetite further, as markets increasingly anticipate a more hawkish Federal Reserve in 2025.

According to the CME FedWatch tool, interest rate traders largely expect the Federal Funds rate to remain steady at 4.25% to 4.5% for most of the year. Expectations for a rate cut only begin to surface in the later months—September, October, and December. Even then, the probability of a 25 basis-point reduction remains below 40% for each of the final three Federal Open Market Committee meetings of 2025, signaling limited confidence in monetary easing.

Bank of America has recently warned of an extended pause in Federal Reserve policy, with risks even skewed toward a potential rate hike or renewed tightening. The BofA pointed to the rising U.S. 10-year Treasury note yield, a key barometer for interest rate, growth, and inflation expectations. "We think the cutting cycle is over, and our base case has the Fed on an extended hold," BofA analysts stated in a note, as reported by Reuters. "But we think the risks for the next move are skewed toward a hike."

Market unease amid anticipation of hawkish Fed

According to QCP Capital analysts, multiple market indicators suggest persistent inflation is still a major problem. "After last week's macro data, rumors of any imminent rate cuts have gone up in smoke as equities have tumbled lower, and potential Trump-era tariffs have also ignited more inflation fears," QCP Capital analysts said. Stocks have declined amid rising yields. On Wall Street, major indices are under pressure. As of Monday, Dow Futures are down 0.36%, S&P 500 Futures have dropped 0.69%, and Nasdaq Futures have fallen 1%, reflecting the broader risk-off sentiment across financial markets.

Despite the bearish sentiment in risk assets and in the cryptocurrency spot markets, the bitcoin derivatives market has shown relative stability. Implied volatility levels remain modest, with only a slight skew toward puts on the frontend. This suggests that while traders are hedging against potential downside, the market does not anticipate extreme price volatility in the near term.

However, QCP Capital analysts note that bitcoin's role as an inflation hedge could be tested this week as the U.S. economic outlook evolves. "The derivatives market indicates cautious optimism, but crypto isn’t out of the woods yet," the firm said.