Bitcoin Dips Below $104K, Triggering $600M+ in Long Liquidations Amid Rising Trade Tensions

Bitcoin’s price fell below $104,000 on May 31, sparking over $600 million in liquidations as traders rushed to close long positions amid growing uncertainty. This marks the largest crypto liquidation event since February, reflecting heightened market stress driven by geopolitical developments.

According to Coinglass, the total liquidations hit $688 million in the past 24 hours, with longs accounting for nearly 90% of the forced closures. The biggest single liquidation was a $12.25 million BTC/USDT trade on OKX. Bitcoin futures led the losses, liquidating $153 million, while Ethereum followed with $122 million. Other tokens like Solana, XRP, and Dogecoin also suffered multi-million-dollar liquidations.

The selling pressure coincided with renewed U.S.-China trade tensions after President Donald Trump accused China of breaching a tariff agreement and increased tariffs on steel and aluminum imports to 50%. These announcements rattled global markets and intensified fears of a broader economic slowdown.

China, already subject to tariffs on most steel exports, criticized the U.S. move, urging a return to dialogue. However, the tariff escalation unsettled risk assets worldwide, including cryptocurrencies.

The broader crypto market saw significant declines as well, with Ether down nearly 4%, XRP and Solana dropping between 4% and 5%, and Dogecoin falling over 8%. Equity markets were also pressured, reflecting a risk-off mood.

Data from Deribit reveals a surge in open interest for Bitcoin futures, up 51% since April, and a 126% increase in options activity, indicating heightened speculative bets. Yet, large Bitcoin holders, or whales, appear to be selling into strength, sending coins back to exchanges—a common sign of profit-taking before potential market shifts.

Market experts suggest this wave of liquidations may represent an overreaction that could precede a price correction. Still, with trade tensions flaring and derivatives markets volatile, traders should brace for continued swings in the near term.