Will Crypto Market Crash Deeper As $1B In Bitcoin, ETH, XRP Liquidated Ahead PCE Data?
On Thursday, the crypto market experienced a significant sell-off, with over $1 billion in liquidations across major cryptocurrencies as traders braced for the release of the U.S. Personal Consumption Expenditures (PCE) inflation data and a major Bitcoin options expiry.
According to CoinGlass data, total crypto liquidations reached $1 billion in the past 24 hours, impacting 176,530 traders. Long positions accounted for $780.05 million of the losses, while short positions contributed $220.54 million. Bitcoin led the liquidation wave with $415.83 million, followed by Ethereum at $230.31 million and XRP at $14.22 million.
At the time of writing, Bitcoin was trading at $61,691, down 1.57% in the last 24 hours. Ethereum fell 1.14% to $1,651, while XRP declined 1.75% to $1.08.
The Bitcoin options market on Deribit is set to expire with around $10 billion in contracts on Friday, many of which were struck at higher prices. With current prices well below those strike levels, traders may need to adjust positions or increase downside hedging.
In derivatives markets, Binance and OKX traders maintain long-short ratios of 2.57 and 2.66 respectively for XRP futures, indicating a bullish bias. However, these imbalances raise the risk of further liquidations if selling pressure persists.
Institutional demand has weakened significantly. U.S. spot Bitcoin ETFs have seen net outflows of approximately $6.4 billion in the past 30 days, marking the largest monthly redemption on record for BTC ETFs.
Strategy (formerly MicroStrategy) shares also added to market anxiety, with MSTR stock price falling below $100 after a 9.26% drop on Wednesday. The decline briefly pushed Bitcoin below $60,000, raising fears that weakness in the stock could dampen overall sentiment.
Prediction market data shows 64% odds that Bitcoin will drop below $50,000, with the probability of a drop to $45,000 rising to 46%.
All eyes are now on the upcoming U.S. PCE inflation report, the Federal Reserve’s preferred inflation gauge. Economists expect headline PCE to rise 0.5% month-over-month in May, up from 0.4% in April, with annual inflation forecast at 4.1% versus 3.8% previously. Core PCE is projected at 0.3% monthly and 3.4% annually. A stronger-than-expected reading could fuel concerns that the Fed will maintain higher interest rates for longer, adding stress to risk assets.
These fears have been heightened by Bank of America’s recent forecast change, with analysts now projecting three interest rate hikes this year, a stark reversal from earlier expectations of a Fed pause.
Bitcoin is facing a critical test at the $59,000 support level, according to crypto analyst Ted Pillows. He noted on X that the recent rally was driven primarily by short covering, and a sustained recovery would require genuine spot demand to reclaim $65,000. Immediate resistance is at $64,200, with another supply zone at $66,600 and a major resistance at $70,600. If support at $59,000 fails, a further decline to $56,500 or even $55,100 could occur.