Bitcoin Correction Triggers $630M in Liquidations
Bitcoin Drops 5.8% From $82,000 – $630 Million in Liquidations Highlight Derivatives Pressure
Key Takeaways
- Bitcoin fell 5.8% from $82,000 and dropped below $77,000, triggering $630 million in liquidations on May 17.
- About 90% of liquidations came from long positions, according to CoinGlass.
- The Coinbase Premium Index remains in negative territory, indicating weak U.S. spot demand.
- Bitcoin ETF flows have turned negative, with outflows leading.
- Long-term holder supply has risen to 15.26 million BTC, the highest level since August 2025.
$630 Million in Liquidations as Bitcoin Breaks Below $77,000
Bitcoin recorded a 5.8% correction last week from the $82,000 level, a move that intensified after the price slipped below $77,000 on May 17. According to data from CoinGlass, this break triggered $630 million in liquidations in a single day. It marked the first major liquidation cascade in about a month.
The composition of those liquidations stands out. Roughly 90% of the wiped positions were longs. This means traders who had positioned for further upside were forced out of the market as prices fell. In derivatives-driven markets, such imbalances can amplify short-term volatility because automatic liquidations add further sell pressure.
Compared with the previous cascade in April, the recent event was more heavily skewed toward bullish traders. The data suggests that leverage on the long side had built up ahead of the correction and was unwound rapidly once key price levels failed.
Negative Coinbase Premium and ETF Outflows Signal Risk-Off Mood
While derivatives markets showed acute stress, spot market indicators point to softer demand, particularly from U.S. participants. CryptoQuant data shows that the Coinbase Premium Index remains in negative territory. This metric tracks the price difference between Bitcoin on Coinbase and other exchanges. A negative reading indicates weaker buying pressure on Coinbase relative to global platforms.
At the same time, Bitcoin exchange-traded funds have flipped to net outflows. Instead of attracting fresh capital, ETFs are seeing more funds leave than enter. This shift reinforces a broader risk-off tone among institutional investors.
Together, these indicators reflect a cooling in short-term demand. For market participants who rely on ETF flows and U.S. spot activity as sentiment gauges, the current setup points to reduced conviction from institutional and U.S.-based buyers.
Long-Term Holders Increase Supply to 15.26 Million BTC
Despite short-term selling pressure and heavy long liquidations, on-chain data shows that long-term holders continue to accumulate. According to CryptoQuant, long-term holder supply has risen to 15.26 million BTC, the highest level since August 2025.
Over the past 30 days alone, long-term holders added 316,000 BTC. This accumulation reversed the 650,000 BTC that left long-term wallets during the late-year selloff. The data indicates that coins previously distributed during that period have been reabsorbed into wallets categorized as long-term holdings.
In addition, Binance Research reports that nearly 60% of the total Bitcoin supply has not moved in over a year. Such metrics are commonly used to assess the proportion of coins held by investors with extended time horizons rather than active traders.
At the same time, the SLRV indicator cited in the Binance Research report is positioned deep in its historical bottom zone, signaling market apathy. This setup reflects a market structure in which long-term holders dominate supply while short-term participants remain comparatively sidelined.
Price Remains Over 30% Below Peak as Supply Tightens
Bitcoin is still trading more than 30% below its $126,000 peak. Even so, the proportion of supply held by long-term investors continues to rise. This divergence between price performance and holding behavior suggests that recent volatility has not translated into broad-based capitulation among longer-term market participants.
In earlier correction phases, sharp price declines were often accompanied by significant distribution from long-term wallets. Current data does not show a similar pattern. Instead, the supply held by long-term investors is expanding, and coins remain largely dormant.
The recent move therefore reflects a combination of leveraged position unwinding in derivatives markets and softer institutional flows, rather than large-scale selling from entrenched holders.
Our Assessment
The latest Bitcoin pullback combined a 5.8% price decline with $630 million in liquidations, predominantly affecting long positions. Spot market indicators show weaker U.S. demand and net ETF outflows, pointing to short-term pressure. At the same time, long-term holder supply has reached 15.26 million BTC, with 316,000 BTC accumulated over the past month and nearly 60% of total supply unmoved for more than a year. The data highlights a divergence between short-term derivatives stress and continued long-term accumulation.
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