Are We Nearing the Bottom? A Deep-Dive Into This Week's Crypto Liquidations

If you only read one line of this article, make it this one: on Friday morning, Bitcoin slipped below $60,000 for the first time since October 2024, before quickly bouncing back above $61,000. To get there, the market torched roughly five billion dollars in leveraged bets over five days, the worst stretch of forced selling since February.

That sets up the question on every trader's mind. After a drop this brutal, this fast, are we finally near the bottom? The honest answer is that the evidence genuinely cuts both ways, and the point of this piece is to lay out each side clearly enough that you can weigh it yourself.

Let's start with what a "liquidation" even is, because the whole week revolves around it. When traders bet on price using borrowed money (leverage), the exchange demands they keep a minimum amount of their own cash backing the trade. When the price moves against them past a certain point, the exchange doesn't wait. It force-closes the position automatically and sells, whether the trader likes it or not. Do that to thousands of traders at once and you get a cascade: forced selling pushes the price lower, which triggers the next batch of forced selling, and so on. That feedback loop is what made this week ugly.

This wasn't one dramatic crash. It was a slow bleed, with the pain getting worse each day as one support level after another gave way.

The month opened nervously. On Monday, around $570 million in positions were wiped out, three-quarters of them belonging to traders who had bet on prices going up. The market's Fear & Greed gauge, a simple sentiment thermometer, sat deep in "Extreme Fear." Bitcoin had just closed its third losing month of 2026.

By Tuesday the mood curdled. Bitcoin sank to a two-month low and liquidations jumped to nearly $1.5 billion in a single day, the biggest one-day figure since February, with close to $800 million of that in Bitcoin alone. A big trigger that week was news that Strategy, the corporate giant that had been Bitcoin's single largest buyer, had turned seller for the first time since 2022. When the market's biggest believer blinks, everyone notices.

Wednesday and Thursday were the heart of the storm. Bitcoin slid through $63,000, then plunged on Thursday morning all the way to about $61,300 before recovering toward $62,500. Over those two days alone, roughly $3 billion in leveraged positions were liquidated. On the worst single day, Thursday, about 85% of the liquidations were traders betting on a rise, Bitcoin holders lost around $750 million in forced closures, Ethereum traders about $390 million, and the largest single forced sale was a $16 million Bitcoin position on the exchange Hyperliquid.

Then came Friday, and it got worse before it got better. Bitcoin opened near $63,800, slid through $62,000, and then briefly punched below $60,000, a line it hadn't crossed since October 2024. That break flushed out the last nervous longs and sparked a wave of dip-buying that snapped the price back above $61,000 within minutes. Friday's liquidations ran about $1.2 billion, this time a less lopsided split, with roughly three-quarters longs and one-quarter shorts.

Add it all up and the week cost the market on the order of five billion dollars in forced liquidations. Treat that as a ballpark, not a precise figure, for reasons explained in the methodology note at the end.

Beyond the raw dollar amounts, a few numbers explain the character of this sell-off.

First, it was overwhelmingly a "long squeeze." Every single day, the large majority of liquidations, between 75% and 85%, hit traders who were betting prices would climb. That's the fingerprint of a market that walked into June far too confident and far too leveraged on the upside, then got cleaned out. It is not a market where short-sellers got caught wrong-footed.

Second, and more encouraging for anyone hoping the worst is over: the amount of borrowed money in the system shrank sharply. "Open interest," the total value of all outstanding leveraged bets, fell 8.5% to about $111 billion as the sell-off hit. Bitcoin's share dropped back from a record high above 800,000 BTC. In plain English, the over-leveraged longs got wiped out and bears aren't aggressively piling on new bets to replace them. Less borrowed money in the system means less fuel for the next forced-selling cascade.

There was one glaring exception: Solana. While bets unwound everywhere else, the leverage stacked on Solana climbed to a record even as its price fell, a combination that usually means traders are aggressively betting against it. That tracks with Solana being the one major coin to break below its February low.

The options market, where traders buy protection against price moves, was flashing fear too. Demand surged for contracts that pay out if Bitcoin falls, with over a billion dollars of bets clustered at the $60,000 level and the most-traded contract of the week sitting at $55,000. Translation: the smart money was paying up to hedge against more downside, not betting on a snapback.

The price damage is severe in context. Bitcoin's dip under $60,000 put it more than half below its October 2025 record near $126,000, the textbook definition of a bear market. It was crypto's worst week since July 2024. Bitcoin lost roughly 14.5% on the week; Ethereum fared worse, down more than 17% and sitting near $1,600, its weakest since April 2025.

Three curveballs made Friday especially messy, and they matter for the bottom question:

The U.S. jobs report came in hot, not soft. Strong employment data pushes the Federal Reserve toward keeping interest rates high, or even raising them. That's a headwind for risky assets like crypto, because when safe cash and bonds pay well, speculative bets look less attractive. This is the opposite of the backdrop that helped Bitcoin recover from past bottoms.

A privacy coin called Zcash crashed more than 40% after a researcher found a software bug that could have allowed someone to mint unlimited tokens out of thin air. The panic spread to similar coins. Notably, Zcash's collapse came mostly from ordinary spot selling rather than a leverage wipeout, a reminder that not every crash is about liquidations.

And there was a quieter, almost hopeful footnote: the relentless investor exodus from U.S. Bitcoin funds finally paused on Friday. After 13 straight days of withdrawals totaling about $4.4 billion, the funds took in a tiny net inflow. One day doesn't make a trend, but the bleeding at least stopped.

There's also a structural problem lurking under all of this. Analysts have repeatedly warned that the market never fully rebuilt its depth, the cushion of standing buy and sell orders, after a big leverage wipeout last October. Thin order books mean it takes less money to send prices lurching, which is why smaller coins fell 10% to 13% in a day this week. Monthly trading volume, meanwhile, was the lowest since October 2023.

Here is the genuinely two-sided case. Neither half is spin.

The reasons to think a floor is near. Bitcoin touched, and Friday briefly broke, its 200-week moving average around $60,000 to $61,300. That's a long-term trend line it has reached only at the major bottoms of December 2018, March 2020 and November 2022, and in every prior case the price eventually recovered to new highs. On top of that, a respected on-chain measure just crossed a line it only crosses in deep bear markets: more than half of all Bitcoin in existence (about 10.5 million coins) is now worth less than what its owners paid, versus 9.8 million coins still in profit. The first time this cycle. Add in long-term holders selling at a loss (a classic sign of capitulation), an oversold reading on momentum gauges comparable to past cycle lows, and that big reset in leverage, and you have a real cluster of bottoming signals.

The reasons to stay cautious. As one prominent analyst put it this week, bottoms are processes, not events. Hitting an oversold level doesn't mean the low is in. In 2022, Bitcoin stayed below this same 200-week line for roughly 16 months. The crossover signal tells you that you're in a bottoming zone, not that the rebound starts tomorrow; in past cycles that zone lasted anywhere from one month to a full year. Worse, the macro backdrop is missing its usual ingredient. In every previous recovery from this line, the Fed was cutting rates or about to. With Friday's hot jobs data pushing rate expectations the other way, that tailwind isn't here. The options market is still leaning bearish, and if $60,000 fails decisively, the next real support sits near $54,000.

Put simply, three things to watch in the next two weeks will likely settle it: whether those fund outflows stay stopped, what the Fed and Bank of Japan signal at their mid-June meetings, and whether Bitcoin can carve out a higher low rather than a lower one.

The plain-English summary: this was a long squeeze, around five billion dollars of mostly upside bets cleared over five days, that drove Bitcoin to a historically important floor near $60,000 and triggered a genuine, rarely-seen on-chain bottoming signal. Those signals are real and they're constructive on a long horizon. But not one of them is a timing tool, and even the analysts pointing them out are explicit that the missing rate-cut tailwind makes this recovery's timing uncertain.

For anyone actively trading or investing, a few practical notes, none of which is investment advice. The clearest line in the sand is a weekly close below $60,000; hold above it and the bottoming-zone story stays intact, lose it convincingly and the structure points toward the mid-$50,000s. Smaller coins are especially dangerous right now because their thin order books exaggerate every move, so size positions with that in mind. And with the options market, leverage and momentum all still leaning bearish, aggressively betting on a sharp bounce into resistance has poor odds until the fund flows clearly turn positive. The cleaner, lower-stress approach that most level-headed voices are emphasizing this week is patience and gradual averaging rather than trying to catch the exact bottom.

This is market analysis, not investment advice. Crypto is highly volatile and you can lose money.

The numbers, with sources

Daily liquidation tallies (each a rolling 24-hour figure): Monday ~$570 million; Tuesday ~$1.5 billion (largest since February); Wednesday roughly $1.1 billion on some trackers, with others reading higher; Thursday ~$1.6 to $1.7 billion; Friday ~$1.2 billion (76% longs, 24% shorts), led by Bitcoin $364 million, Ether $291 million and Zcash $107 million. Two-day total for Wednesday-Thursday: about $3 billion (CoinDesk). Five-day total: roughly $5 billion as a consolidated estimate.

Thursday's breakdown by coin: Bitcoin ~$750 to $777 million, Ether ~$390 to $398 million, Solana ~$89 million; largest single liquidation $16.2 million (BTC, on Hyperliquid).

Price action: Bitcoin briefly below $60,000 Friday (first time since October 2024), bouncing above $61,000; down ~14.5% on the week and more than 50% below its ~$126,000 October 2025 record. Ether down more than 17% on the week, near $1,600, weakest since April 2025.

Derivatives: total open interest down 8.5% to $111.4 billion; Bitcoin open interest down from a record above 800,000 BTC to ~766,000 BTC; Solana open interest at a record into falling prices; 24-hour futures volume +2.9% to $305 billion; heavy put-option positioning at $60,000 (over $1 billion notional) and $55,000.

Flows and macro: U.S. spot Bitcoin ETFs ended a record 13-session outflow streak (~$4.4 billion total) with a small net inflow Friday; total Bitcoin ETF holdings down ~7.2% from their October 2025 peak to ~1.28 million BTC; monthly spot volume the lowest since October 2023; Strategy turned net seller of Bitcoin for the first time since 2022; U.S. jobs data beat forecasts, raising rate-hike concerns; Zcash fell ~40% on a disclosed software exploit.

Bottom signals: 200-week moving average ~$60,000 to $61,300; Bitcoin supply in loss ~10.5 million BTC versus ~9.8 million in profit (first crossover this cycle, per Glassnode); long-term holder selling at a loss; next major support, the network's realized price, near $54,000.

A note on accuracy. Liquidation figures vary noticeably between data providers (CoinGlass, individual exchanges, and various trackers) because each covers a different set of exchanges and slightly different 24-hour windows, and because exchanges throttle their own liquidation data feeds, the reported totals are widely understood to understate the true scale of forced selling. Where a single day showed conflicting numbers, a range is given rather than a false-precision figure, and CoinDesk/CoinGlass readings are used as the anchor where available. The five-day total is an estimate, not a precise sum, because stacking overlapping 24-hour windows risks double-counting.