Crypto's worst two-day liquidation in months deepens as investors chase the AI trade elsewhere
04 Jun 2026 11:02 UTC
BTC price crashed to $61,300 before recovering to $62,500 as $3 billion in liquidations hit over two days and traders loaded up on $60,000 puts anticipating further losses.
➤ Investors are reportedly shifting focus from crypto to AI-related trades in traditional markets, exacerbating crypto's market structure issues and contributing to altcoin underperformance.
➤ Derivatives markets show strong bearish sentiment, with increased put options activity and rising implied volatility, suggesting traders anticipate further price declines.
➤ Bitcoin experienced a significant price drop to $61,300, leading to $3 billion in liquidations over two days and a decline in open interest, indicating a deleveraging market.
Bitcoin steadies above $60,000 while derivatives send an unambiguous warning
BTC crashed to $61,300 before recovering to $62,500 with $3 billion in liquidations over two days. Traders loaded up on $60,000 puts in anticipation of further declines.
Oliver Knight
Omkar Godbole
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Edited by
Sheldon Reback
Jun 4, 2026, 6:02 p.m.
3 min read
Bitcoin price (CoinDesk Data)
What to know:
• Bitcoin plunged to $61,300 before recovering to around $62,500, contributing to $3 billion in liquidations over two days as open interest fell 8.5% to $111.4 billion.
• Derivatives markets are firmly in bear territory. Put skews have strengthened on both bitcoin and ether and the $60,000 strike put on Deribit carries over $1 billion in notional open interest.
• Solana open interest surged to a record even as prices fell, a combination that typically signals aggressive short accumulation and reflects SOL's relative weakness after breaking below its February low.
Ether (ETH) lost 3% since midnight UTC, now trading at around $1,750. Several other altcoins saw deeper declines, with NEAR, ZEC and JUP all losing more than 13%.
The downside move triggered a wave of liquidations with $1.7 billion worth of futures positions being forcibly closed due to the slide, $750 million worth of that can be attributed to bitcoin, $390 million to ether.
Investors appear to be deserting crypto to pursue the AI narrative in traditional markets, exacerbating the geopolitical uncertainty and a fundamentally broken market structure that has failed to recover from October's leverage wipeout.
Derivatives positioning
• Total 24-hour futures volume rose 2.9% to $305 billion, an increase that reflects elevated but not panicked activity. More telling is open interest, which declined 8.5% to $111.4 billion, a sign that leveraged positions are being unwound rather than fresh bets being added.
• Liquidations have been severe: Roughly $3 billion in leveraged positions have been wiped out over the past two days, with the 24-hour tally alone reaching $1.7 billion.
• Bitcoin's open interest has pulled back to 766,000 BTC from yesterday's record highs above 800,000 BTC. The decline suggests the price plunge has flushed out a significant portion of leveraged longs and that bears are not aggressively building new directional bets, at least not in BTC. The same dynamic holds for ether (ETH) and XRP.
• Solana is a notable exception. Open interest in SOL surged to a record 72.16 million tokens even as prices declined, a combination that typically signals an influx of short positions. The sentiment is understandable given SOL dropped below its February low while BTC, ETH and XRP held above theirs.
• TRX and ADA are also seeing open interest rise as their prices fall, suggesting similar short-side accumulation in those markets.
• Derivatives' broader tone confirms the bearish tilt. The 24-hour cumulative volume delta across the top 20 tokens is negative, meaning traders are selling at market prices rather than limit orders. This active, aggressive bearish participation suggests potential for deeper losses.
• Implied volatility is rising in tandem. Volmex's 30-day implied volatility indexes for bitcoin (BVIV) and ether (EVIV) have surged over the past three sessions, reflecting growing demand for options-based hedging and heightened expectations of continued price swings.
• Put skews have strengthened in both bitcoin and ether, signaling that investors are willing to pay a premium for downside protection. The $60,000 strike put on Deribit carries over $1 billion in notional open interest. As spot prices approach that strike, large position adjustments become increasingly likely, which could amplify volatility.
• The $55,000 put was the most actively traded options contract in the past 24 hours. The message from derivatives markets is unambiguous: Sentiment is bearish.
Token talk
• The altcoin market underperformed crypto majors on Thursday. Even recent darling HYPE lost 12% after hitting a record high earlier this week.
• DASH, ENA and FET also fell by more than 10% since midnight UTC as the lack of liquidity in altcoin pairs reared its head again.
• Market depth is typically much lower on altcoin pairs than on bitcoin or ether, so the amount of capital it takes to move prices in either direction is relatively low. Pair that with a wave of liquidations and the asset simply can't maintain the level of supply, causing exaggerated price moves to the downside.
• Monero (XMR), despite being down by 4% since midnight, is still in the black over 24 hours. Trading at $347, it is seemingly unperturbed by the broader market crash.
• Much of the altcoin trajectory will depend on bitcoin's ability to hold above $60,000. A break below that could trigger further liquidations, which would weigh more on the illiquid altcoin pairs.
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Categories rationale: The article focuses on the recent price crash, liquidations, and derivatives market sentiment, which directly relates to 'Scalability' through 'Market Depth & Liquidity' and 'Market Cycles & Macro Sensitivity' through 'Market Volatility & Liquidity'. The discussion of price swings and investor behavior fits these categories.Characteristics justification: The article details a significant price crash, large liquidations, and bearish sentiment in derivatives markets, indicating high volatility and negative market conditions. The mention of investors chasing 'AI trade elsewhere' suggests a shift away from crypto, contributing to uncertainty and negative sentiment. The high relevance score is due to the focus on specific market events and derivatives positioning.Tag relevance: The tags 'bitcoin', 'liquidations', 'derivatives', 'options', 'solana', 'altcoins', 'ai trade', 'bearish sentiment', and 'open interest' are central to the article's narrative, covering the primary asset discussed, the key market events, the instruments used for trading and hedging, and the overall market sentiment.asset-types: others
rwa: false
entropy: 0.85
sentiment: -0.75
staleness: 0.6
relevance: 0.9
uncertainty: 0.7RWATimes slug: coindesk-cryptos-worst-two-day-liquidation-in-months-deepens-as-investors-chase-the-ai-trade-elsewhere-1057744264