Massive Liquidations Shake the Crypto Market — Should Investors Be Worried?

The cryptocurrency market was hit with a wave of volatility on May 31, 2025, as over $800 million in positions were liquidated in a single day. This sudden flush-out came as Bitcoin, Ethereum, Dogecoin, and other major assets slipped in price, wiping out gains made just a week ago. As long traders faced sharp losses, many are now questioning whether this is the start of a broader downtrend—or merely a brief market correction.

Read More: What is a Crypto Liquidation? 

Key Takeaways

• $827 million in crypto positions were liquidated in 24 hours, with $747M from long positions.
• Bitcoin dropped to near $104,000, after peaking above $111K last week.
• Dogecoin led losses among the top 10 coins, sliding nearly 9% to under $0.20.
• Ethereum, Solana, and XRP also declined, contributing to the broader 4.3% market drop.
• Analysts expect short-term weakness before a possible move toward $130K–$150K for Bitcoin.

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Why Did the Liquidations Happen?

The large-scale liquidations were mostly due to overly optimistic long positions in the market. According to CoinGlass, a majority of the $827 million liquidated were long trades—bets that crypto prices would continue to rise.

Bitcoin alone accounted for $222 million in liquidations, with Ethereum following at $122 million. Other high-profile altcoins like Solana, XRP, and Dogecoin also contributed heavily to the daily bloodbath. The broader crypto market dropped over 4.3%, putting many leveraged positions deep into the red.

Market Sentiment Shifts as Bitcoin Retreats

Just last week, Bitcoin hit an all-time high of $111,814, sparking bullish predictions across the board. But the rally was short-lived. As prices pulled back to nearly $104,000, weak hands were shaken out and leverage began to unwind. Bitcoin is currently trading around $104,730, a modest 1.3% drop on the day, but significant enough to trigger mass liquidations in a highly leveraged environment.

This correction follows broader macroeconomic uncertainty, including a weaker-than-expected U.S. GDP report and ongoing legal debates around former President Donald Trump’s global tariff policies—both of which have injected fresh volatility into global markets.

Read More: How to Use the Liquidation Heatmap for Trading

Dogecoin and Altcoins Hit Hard

Among the top 10 cryptocurrencies, Dogecoin was the worst performer, losing 9% to dip below $0.20. This is the lowest level the meme coin has seen since May 8.

Meanwhile:

• Solana fell nearly 5% to $151
• XRP dropped 3.3% to $2.20
• Ethereum declined 3% to $2,573

The sharp pullback in altcoins indicates that the risk appetite has shrunk, with traders retreating to more defensive positions—or exiting the market altogether.

Read more about Solana (SOL):

Solana (SOL), Market Cap, Price Today & Chart History

Solana (SOL) Price Today

How to buy Solana (SOL)

Analyst Perspective: What Comes Next?

According to Valentin Fournier, lead research analyst at BRN, investors should brace for “further short-term weakness” in Bitcoin before the next leg higher.

“We expect a temporary drop toward the $100K level before a broader move toward $130K–$150K, after which altcoins could take over,” he noted.

This aligns with historical crypto cycles where corrections often precede major rallies. If Bitcoin finds support around $100K, it may consolidate before launching another attempt at new highs.

Should Investors Be Worried?

While the sheer scale of liquidations may appear alarming, seasoned crypto investors recognize that such events are not uncommon in a volatile market.

Here’s why this may not be a red flag:

• Liquidations help flush out excess leverage, resetting the market for healthier growth.
• Bitcoin’s long-term uptrend remains intact, supported by strong institutional interest.
• Market dips like these often offer buy-the-dip opportunities for long-term holders.

However, new or highly leveraged investors should remain cautious. Using high leverage in an unpredictable market environment remains risky and can quickly result in significant losses.

Final Thoughts

The $800 million liquidation spike serves as a stark reminder of crypto’s inherent volatility. While long positions were wiped out in droves, the market correction may pave the way for a more sustainable move higher—particularly if Bitcoin holds the psychological $100K level.

For investors, this is a moment to reassess risk, avoid emotional trading, and prepare for both short-term turbulence and long-term growth potential in the digital asset space.

FAQs

Why did the crypto market crash today?

The market crashed due to a combination of overly leveraged long positions being liquidated and broader economic uncertainty, leading to a pullback in major cryptocurrencies.

How much was liquidated in total?

Over $827 million in crypto positions were liquidated in the past 24 hours, according to CoinGlass.

Which coins were most affected?

Bitcoin, Ethereum, Solana, XRP, and Dogecoin were the top five coins contributing to the liquidation wave.

Is Bitcoin still a good investment after this drop?

For long-term investors, Bitcoin's fundamentals remain strong. However, short-term traders should be cautious of further volatility.

Will the crypto market recover soon?

Analysts expect short-term weakness but anticipate a broader rally toward $130K–$150K for Bitcoin later, possibly followed by an altcoin resurgence.