Crypto crash: liquidations surge, BTC-led selloff hits BCH, LUNC, PI, WLFI
A crypto crash is underway on May 18 as Bitcoin leads a broad risk-off selloff. Bitcoin fell to about $76,500 (lowest in ~3 weeks). Bitcoin Cash (BCH) dropped about 7.3%, while Terra Luna Classic (LUNC), Pi Network (PI), and World Liberty Finance (WLFI) each fell more than 5%. Total crypto market cap slipped about 1.36% to ~$2.56T.
The key driver is a jump in liquidations. Liquidations rose 42% in 24 hours to ~$661M. Ethereum positions worth ~$257M were liquidated, and Bitcoin liquidations exceeded ~$182M. Other heavily hit names included SOL, XRP, and BCH. This forced selling can cascade as leveraged traders are forced out, typically overshooting during drawdowns.
Macroeconomic pressure is adding fuel: global bond yields are rising. In the US, the 30-year yield reached ~5.1% and 2-year/10-year were ~4.1%/4.6%. Markets also react to inflation data (CPI 3.8%, PPI 6.0%) and growing expectations of Fed rate hikes—an environment where crypto often underperforms.
On top of price weakness, ETF flows point to weak marginal demand. Spot Bitcoin ETFs reportedly shed over $1B last week, while Ethereum ETFs saw outflows for six straight days, losing ~$255M last week (and ~$83M+ monthly). If a crypto crash continues, traders may expect further downside as sellers stay in control.
Next catalysts mentioned: Donald Trump’s stance on Iran and the upcoming FOMC minutes.
Bearish
Bearish. The article links the crypto crash to a classic deleveraging loop: rising liquidations force sell pressure, which can overshoot and keep liquidity thin. It also adds a second headwind—higher bond yields and rate-hike expectations—often correlated with weaker crypto beta during risk-off regimes. Finally, ETF outflows (BTC and ETH) signal declining marginal demand rather than a simple one-day dip.
In the short term, traders typically stay defensive while liquidation pressure is active; bounces are more likely to fail until liquidation counts cool and yields stabilize. In the medium term, if ETF flows continue negative and real-yield/Fed expectations remain hawkish, the market may remain range-bound to downward, with high-volatility rallies sold. Historically, similar “cascade” events (forced liquidations paired with tightening macro signals) have tended to produce sharp downside before any durable recovery—though mean-reversion bounces can occur once sellers exhaust.