Bitcoin and Ethereum Face Major Liquidations Amid BlackRock’s 5,362 BTC Sale, Triggering Leverage Reset, Market Volatility, and Institutional Asset Rotation
In early June 2025, the cryptocurrency market experienced its largest leveraged liquidation event since February, primarily driven by institutional actions and overleveraged positions in Bitcoin and Ethereum. Bitcoin’s price fell around 7% and Ethereum dropped nearly 12% as BlackRock sold 5,362 BTC, injecting significant liquidity and pushing more BTC onto exchanges. This event triggered a widespread wave of short liquidations above the $106,000 level and caused a critical leverage reset across Bitcoin derivatives markets. The resulting mass unwinding drained liquidity, heightened volatility, and led to a contraction in open interest, as well as a brief deleveraging phase that analysts say could ultimately stabilize the market and boost investor confidence. Open interest and funding rates rebounded after the sell-off, indicating renewed trading activity and a cautiously bullish sentiment. The broader impact extended to other key assets like SOL, XRP, and DOGE, reflecting ongoing institutional asset rotation and interconnected trading strategies. Experts are calling for stricter risk management and monitoring of leverage, with a focus on tracking funding rates, open interest, and ETF inflows to assess future momentum. This event underscores the persistent volatility and systemic risks in crypto trading, but also signals a possible foundation for a more stable rally, presenting new strategic opportunities for traders.
Neutral
This event reflects a significant deleveraging phase caused by both institutional activity, notably BlackRock’s sale of 5,362 BTC, and widespread liquidation of overleveraged positions. While the sell-off led to sharp short-term declines in BTC and ETH, the ensuing contraction in open interest and subsequent stabilization signals that the market is entering a post-liquidation reset. The rebound in open interest and funding rates suggests that speculation is returning to the market, but with greater caution. Although such liquidation events often trigger temporary volatility and bearish sentiment, they can also serve as healthy corrections that lay the groundwork for more sustainable rallies. The presence of renewed trading activity and only cautiously bullish sentiment indicates the outlook remains neutral in the near term until further market direction—potentially driven by ETF inflows, regulatory shifts, or new institutional moves—becomes clear.