Derivatives Bloodbath: $1.16B Liquidated Amid Global Turmoil

The crypto universe was rocked by a brutal tidal wave of liquidations worth $1.16 billion, as short-squeeze vulnerable leveraged longs were caught off guard by a one-two punch: increased Middle East tensions and hotter-than-expected U.S. inflation data. Bitcoin led the way lower, dropping to $103,556 — its worst one-day performance in June—while Ethereum, Solana, and the rest of the majors lagged behind in a bout of compelled selling. Where the Pain Was Worst: Exchange Breakdown Binance was hit hardest in the carnage, with $458 million in liquidations — over 91% of longs. Bybit wasn’t too far behind, at $375 million worth of liquidations, close to 94% of longs. OKX and Gate each lost over $125 million, with HTX, Coinex, BitMEX, and Bitfinex finishing off the list with dozens of millions more. These were mostly losses from speculators who were betting on a continued rally — only to be surprised by the sudden geopolitical and macroeconomic storm. Bitcoin lost $446 million in long liquidations alone, with Ethereum losing $303 million. Solana, Dogecoin, and XRP all experienced tens of millions of forced sells, demonstrating just how widespread and severe the pain was across the market. Why Leveraged Longs Are Still High — and Vulnerable Despite repeated warnings, the leverage hunger has not abated. BTC and ETH funding rates have remained positive, which means the traders continue to be strongly speculating on the higher side — even as volatilities have risen. This ongoing optimism provided the context for a traditional liquidation cascade: when prices fell, stop-losses and margin calls triggered a domino effect, which fueled the sell-off and closed out more positions at each major support. How Liquidation Cascades Shape the Market With so many traders on one side of the ship, a little shake will send the market into chaos. The numbers indicate that the first $20 million in liquidations arrived within an hour after the breaking news, but as selling snowballed out of control, nearly $1 billion was lost in just 12 hours. This feedback mechanism — where all liquidation induces further selling — is why crypto corrections are so brutal and why heatmap tools are now an indispensable tool for risk management. “If BTC drops to $92K, bulls could lose $8B more. Watch the heatmap.” — @CoinGlass, June 13, 2025 Heatmaps not only show where the pain was — they show where it is likely to be next. According to recent data, if BTC dips to $92,500, over $8.4 billion of long positions would be liquidated, which would be a critical ”pain point” for bulls. A breakout higher towards $121,900 would short-squeeze, which could unleash a short squeeze of nearly $14 billion. Hedging Ahead of the FOMC: What Traders Can Do Now Since the Federal Reserve’s FOMC sits on June 18, volatility has hardly ceased. Historically, FOMC announcement days are marked by sharp spikes in crypto market volatility since rate decisions and forward guidance are reacted to by traders. Many individuals are now reducing exposure, contracting stops, or buying put options to hedge against further downside. Institutional desks are seeing increasing demand for downside protection, with traders targeting deep out-of-the-money puts as insurance against another liquidation cascade. The broader macro environment — rising inflation, geopolitical tension, and uncertainty regarding the Fed’s policy — makes risk management more critical than ever before. Traders need to watch the funding rates, heatmaps, and the all-important support levels, and stay alert for the sentiment shifts as the Fed announcement approaches. The Bottom Line The $1.16 billion liquidation event is a testament to the dangers of a highly levered, sentiment-driven market. As war news and inflation reads collide with packed derivatives bets, only the ones that manage risk and watch the heatmaps will make it through the next leg. With the FOMC lined up, expect more fireworks—and remember: in crypto, the only thing certain is volatility.

Source: Coinpaper