Main Points:
- A sudden drop from $111,000 to below $109,000 triggered $185 million in forced long liquidations, disproportionately affecting highly-leveraged short-term traders.
- Short-term traders have been under pressure amid broader $500 million+ liquidations over recent days, driven by macro uncertainties and technical highs.
- Long-term holders (LTHs) have increased their realized capitalization to over $280 billion, marking the highest level since April and signaling opportunistic accumulation.
- Some new whale investors are taking profits after a brief rebound above $110,000, even as LTHs continue to add to their positions.
- Broader market context includes elevated bond yields in Japan, a looming $13.8 billion BTC options expiry, and altcoin liquidations, suggesting volatility ahead.
Background: The Liquidation Cascade
On May 26, Bitcoin’s price breached the key psychological support at $111,000, sparking a cascade of collateral calls across margin-trading platforms. According to CryptoQuant analyst Amr Taha, the initial sell-off around $111,900 liquidated over $97 million in long positions, followed by a second wave near $109,000 that wiped out an additional $88 million within hours. In total, short-term traders lost approximately $185 million as their highly-leveraged bets were forcibly closed.
These forced liquidations exacerbated the price decline, driving Bitcoin briefly down to $107,000 before a modest rebound pushed it back into the $110,000 area on May 27. Over the preceding 24 hours, leveraged crypto bets across major exchanges saw over $500 million in liquidations, indicating that traders were caught off-guard by both macro developments and technical resistance zones.
Short-Term Traders Under Strain
Short-term holders (STHs), defined as wallets moving coins within 155 days of acquisition, have borne the brunt of the recent volatility. High leverage levels—often exceeding 10× on popular platforms—amplified even a 1.8% drop into a liquidations cascade. CoinDesk reported that over $500 million in long-side liquidations occurred as Bitcoin hovered around $108,000, driven in part by external factors such as U.S. tariff threats and geopolitical uncertainties.
Similarly, wider crypto markets felt pressure: Ether, Cardano, and Dogecoin experienced significant short liquidations earlier in May, with over $800 million wiped out in short positions during a mid-month rally. This trend underscores that volatility remains high across major tokens, as traders ride on-chain momentum and macro news cycles.
Opportunistic Accumulation by Long-Term Holders
In stark contrast, long-term holders (LTHs)—addresses holding BTC for 155 days or more—have responded by increasing their positions. CryptoQuant’s STH/LTH Net Realized Cap chart shows LTH realized capitalization surging past $280 billion, the highest since April 2025. This metric reflects more coins changing hands at higher costs, implying that seasoned investors are absorbing sell-side pressure from margin calls.
Glassnode’s Binary Spending Indicator confirms that LTH spending remains subdued, signaling a strong commitment to HODL despite market dips. Weekly on-chain reports note a continued shift of supply toward LTH wallets, with over 300,000 BTC moving off exchanges into long-term cold storage in late May. This behavior suggests a bullish outlook among price-insensitive investors, even as short-term traders capitulate.
Whale Profit-Taking and Broader Market Signals
While LTHs accumulate, some newly active whales are locking in gains following the brief price rebound above $110,000. Data from CryptoRank indicate that a subset of large addresses have begun selling into strength, capitalizing on forced-sell events to realize profits. This divergent behavior between long-term and large-cap traders highlights nuanced strategies: LTHs view dips as buying opportunities, whereas tactical whales exploit liquidity to rebalance portfolios.
Meanwhile, macroeconomic factors—such as Japan’s bond market volatility—have played a supporting role. On May 20, Japanese 30-year government bond yields reached an all-time high of 3.185% before easing slightly, reinforcing Bitcoin’s appeal as an alternative hedge asset. Furthermore, the looming $13.8 billion BTC options expiry on May 30 could introduce additional directional pressure, as bulls seek to defend key strikes at $110,000–$115,000.
Conclusion: Volatility and Opportunity
Bitcoin’s recent plunge below $109,000 and the ensuing $185 million in long liquidations underscore the risks inherent in high-leverage trading. Short-term participants have been squeezed out, while long-term holders have taken advantage of the stress to deepen their stakes, pushing the LTH realized cap to multi-month highs. As tactical whales harvest profits on rallies, macro drivers such as rising bond yields and a major options expiry set the stage for continued volatility.
For traders and investors hunting new crypto assets or seeking revenue streams, this dynamic offers both cautionary lessons and buying opportunities. The forced sell-off cleared excess leverage, potentially paving the way for a more sustainable uptrend if demand from long-term holders persists. However, with technical resistances clustered around $110,000–$115,000 and significant derivatives expiries on the horizon, careful risk management remains paramount. Ultimately, Bitcoin’s path in the coming days will depend on whether the buying power of LTHs and spot investors can outweigh the selling pressure of liquidations and options-driven flows.
