Bitcoin and Ethereum Slammed by $1.1B Liquidations as ETF Outflows Mount

Crypto markets just got hit by a brutal reset as Bitcoin and Ethereum were slammed by leveraged liquidations, heavy ETF outflows, and a broad unwind in speculative bets. The flush was ugly, but it also yanked a lot of excess leverage out of the system.

• Bitcoin dropped from above $80,000 to near $60,000
• Ethereum fell below $1,800 and toward $1,700
• Over $1.1 billion in leveraged positions were liquidated in 48 hours
• U.S. spot Bitcoin ETFs posted 13 straight days of outflows
• Open interest in BTC and ETH futures fell to multi-month lows

Bitcoin hit a session low of $61,057 on June 5 after sliding from above $80,000, while Ethereum sank below $1,800 for the first time since May 2025 and drifted toward the $1,700 zone. ETH is now down roughly 45% year-to-date, a reminder that crypto’s favorite fairy tale — the one where everything only goes up — gets demolished the moment leverage and bad timing collide.

Leverage got smoked

According to Santiment, Bitcoin open interest fell about 25% in just four days, landing around $23.2 billion, its lowest level since early April. Ethereum open interest dropped 13% to $9.8 billion, the weakest reading since March. Open interest is the total value of outstanding futures contracts — basically the amount of borrowed speculation still sitting in the market. When it drops this fast, it usually means traders are getting forced out, scared out, or both.

In plain English: too many people were leaning the same way, using borrowed money to bet on higher prices, and then the market shoved them straight into the wall.

That’s what a liquidation cascade looks like. When price falls, exchanges automatically close out overleveraged positions that can no longer meet margin requirements. Those forced sales push price lower, which triggers more liquidations, which pushes price lower again. It’s the crypto equivalent of falling down a staircase while people keep throwing shopping carts at you.

More than $1.1 billion in leveraged positions were liquidated in a 48-hour window, and longs took the overwhelming share of the damage. Coinglass data showed roughly 85% to 90% of the liquidated volume came from long positions. That means the market was heavily tilted toward upside bets before the rug got yanked.

“Crypto is going through one of its worst weeks”

That’s not some melodramatic trader tweet. It’s a fair description of the bloodbath.

Bitcoin ETF outflows added more pressure

The selloff wasn’t just a derivatives problem. The U.S. spot Bitcoin ETF market has been bleeding too. These funds had become one of the biggest sources of demand for Bitcoin earlier in the cycle, so when they flip into net outflows, the bullish narrative takes a serious punch to the throat.

Spot Bitcoin ETFs recorded 13 straight sessions of net redemptions. Since mid-May, around $4.4 billion has been pulled from the Bitcoin ETF cohort, equal to roughly 59,000 BTC sold across the group. BlackRock’s iShares Bitcoin Trust, or IBIT, led the retreat and accounted for about $3.3 billion of those outflows. Fidelity’s FBTC and Grayscale’s GBTC also contributed, but IBIT was the main drain.

On one particularly rough day, total ETF outflows hit about $396.6 million, with IBIT alone responsible for more than $340 million of that. Reportedly, Bitcoin ETF assets under management fell from around $104 billion to roughly $83 billion in a single month.

That’s a serious reversal. These products were pitched — correctly — as a major institutional on-ramp for Bitcoin. But when the same institutions start heading for the exit, even if temporarily, the market feels it fast. ETFs don’t create magic. They create flow. And right now, the flow has been going the wrong way.

“The spot Bitcoin ETF market has been bleeding”

“The outflows signal waning institutional conviction”

There’s also a broader backdrop of risk-off sentiment. Market pressure was amplified by news of the U.S. seizing $1 billion in Iranian crypto assets, another ugly headline in a week already packed with bad vibes. It’s probably not the sole driver of the selloff, but it adds to the mess. In crypto, bad news tends to arrive in packs, like raccoons in a dumpster.

Why this may actually help later

As painful as this was, liquidations often reset the market in ways that matter. They strip out speculative capital, reduce the amount of leverage sitting on the sidelines waiting to blow up, and leave behind a cleaner base for future price discovery.

“Liquidations are painful for traders caught on the wrong side of the move, they often help reset market conditions”

“The recent liquidation event has brought Bitcoin and Ethereum open interest back toward multi-month lows”

“The result is a market that looks fundamentally different from just two weeks ago”

That last point matters. Two weeks can be an eternity in crypto when the market is overstuffed with borrowed money and everyone thinks they’re a genius. The purge is brutal, but sometimes necessary.

Bitcoin’s current battleground sits around $60,000, while Ethereum’s key near-term area is around $1,700. These are not magical floors. They’re zones where buyers may step in, where stops may cluster, and where a lot of people will suddenly discover they are very brave in public and very nervous in private.

For long-term holders, this zone has historically offered value. That doesn’t mean every dip is a gift. Sometimes a dip is just a dip. But from a higher-time-frame perspective, forced deleveraging can create the sort of conditions that eventually support stronger moves — if conviction actually returns.

Ethereum’s problem is bigger than price

Ethereum has its own mess to deal with. The selloff wasn’t only about broad market weakness. ETH also got hit by a public disagreement between Bankless co-founders Ryan Sean Adams and David Hoffman over what ETH is actually worth.

Adams has argued that Ethereum’s success is tied to ETH’s role as a store of value. Hoffman, meanwhile, has pushed the idea that the network and the token should be evaluated separately. That may sound like internal crypto nerd drama, but it exposes a real problem: Ethereum’s value thesis remains muddier than Bitcoin’s.

Bitcoin has a clean story. It’s hard money, a monetary asset, and the clearest crypto store of value. Ethereum is more complicated. Is ETH fuel for the network? Is it a productive asset? Is it money? Is it a discount to network usage? Is it an upside bet on smart contract activity? The answer changes depending on who’s doing the talking, which is exactly the problem.

That’s why this matters:

If a market can’t agree on what the asset is for, it’s harder to price it with confidence. And when confidence fades, leverage does the rest of the damage.

“Ethereum needs a catalyst”

That’s the blunt truth. ETH needs a reason for traders and investors to care again. That could come from stronger on-chain activity, better token economics, a renewed risk-on appetite, or a more convincing monetary narrative. Without that, Ethereum risks staying trapped in the uncomfortable zone between “important protocol” and “token nobody can clearly defend at the dinner table.”

What comes next

The market is now watching whether Bitcoin can hold the $60,000 zone and whether Ethereum can stabilize above $1,700. Those levels matter because they help define whether this is just a brutal flush or the start of a deeper unwind.

The 200-week moving average and realized price models are also back in focus for Bitcoin. These are long-term valuation frameworks that traders and holders use to judge whether the market is stretched or compressed. They are not crystal balls, and anyone pretending otherwise is selling you incense in a bull market. But they do help frame whether price is approaching areas that historically attracted stronger hands.

The big tell from here is flow. If ETF outflows slow, open interest rebuilds gradually, and spot demand returns, then this drawdown may end up looking like a cleansing event rather than a structural break. If redemptions keep rolling in and support fails, then the market still has more pain to distribute.

Bitcoin and Ethereum were both punished, but the damage wasn’t identical. BTC’s narrative remains comparatively intact, even after the hit. ETH has a deeper identity problem that the market is increasingly willing to price in. That doesn’t make Ethereum dead — not remotely — but it does mean ETH needs more than vibes and hand-waving to win back capital.

Key questions and takeaways

What caused the crypto selloff?
A mix of leveraged long liquidations, heavy Bitcoin ETF outflows, and risk-off sentiment. The market was crowded with speculative bets, and once price slipped, the unwind accelerated.

Why did Bitcoin and Ethereum fall so hard?
Too much leverage was packed into futures markets. When price moved against those positions, forced selling made the drop worse in classic crypto fashion.

How bad were the liquidations?
More than $1.1 billion in leveraged positions were wiped out in 48 hours, with long positions taking the vast majority of the hit.

Why do spot Bitcoin ETF outflows matter?
Because ETFs became a major source of Bitcoin demand. When they flip into sustained outflows, they can deepen downside pressure and weaken sentiment fast.

Why is BlackRock’s IBIT important here?
IBIT was the biggest contributor to the ETF redemptions, making it the main drag on institutional Bitcoin flows during this selloff.

What does falling open interest mean?
It usually means speculative leverage is leaving the market. That can reduce the risk of more liquidation spirals, even if the short-term pain is brutal.

Why is Ethereum under extra pressure?
ETH is not just dealing with price weakness. It’s also wrestling with uncertainty over what gives it value in the first place, which makes it easier for traders to dump when sentiment turns.

Are $60,000 for Bitcoin and $1,700 for Ethereum support levels?
Yes, they’re important zones to watch. They are not guaranteed floors, but they matter because traders cluster around them and react to them.

Is this a healthy reset or a warning sign?
Both. The market may be less overextended now, which is constructive. But the ETF outflows and weak conviction also show how fragile confidence has become.

Does this mean the bull run is over?
Not necessarily. But the market is clearly weaker, more fragile, and more dependent on fresh inflows and a return of conviction.

The leverage got punished, institutional appetite wobbled, and the market finally remembered that gravity still works. If Bitcoin can hold the line and ETF flows stabilize, this may go down as a necessary flush. If not, the next leg lower could be uglier than the last.