Bitcoin flash crash erases $636M in longs; $55K retest eyed

Bitcoin plunged to $61,310 late Wednesday, erasing $636 million in long leveraged bets and triggering roughly $1.73 billion in liquidations across exchanges. The token’s market capitalization fell to about $1.23 trillion before recovering near $1.27 trillion. Since May 29 bitcoin has lost more than $200 billion in market value and is down nearly 30% year-to-date in 2026.

The rout produced sharp intraday swings. Bitcoin reversed toward about $64,600 by midnight but later oscillated between the low $62,000s and mid-$64,000s before slipping below $64,000. During the session the asset was about 3.2% lower on the day and roughly 14% lower over the previous week.

Liquidations were widespread for the third straight day. Positions in bitcoin accounted for more than $803 million in wiped contracts, with long bets making up about $636 million of that total. Across the crypto market exchanges reported roughly $1.43 billion in liquidated long positions and about $307 million in short positions.

Traders pointed to geopolitical tensions in the Middle East and a disclosed sale of 32 bitcoins by MicroStrategy as near-term selling triggers. Michael Saylor, MicroStrategy’s executive chairman, described net outflows from spot exchange-traded products as capital rotation rather than structural impairment. Grayscale Research said the disclosed sale was small relative to the firm’s balance sheet and suggested the sharp reaction reflected a compressed volatility regime where institutional headlines can drive large swings.

Lacie Zhang, a research analyst at Bitget Wallet, wrote: “BTC tested the low-$60Ks, cleared a $1.8 billion liquidation wave, including more than $1.5 billion in long positions, and has already bounced to $63K. Funding rates have flipped deeply negative, open interest has reset sharply, and Fear & Greed is at 12. That is a market that has done significant technical work in a short window.” She warned persistent outflows could push bitcoin back to $55,000–$57,000 and noted crypto may be closer to stabilizing than equity markets.

Nicolai Sondergaard, a research analyst at Nansen, observed traders used the rebound from $61,000 to reduce exposure rather than add risk, and that negative funding rates and a sharp reset in open interest indicate leveraged players adjusted positions quickly after the liquidations.

The liquidations highlighted the concentration of leveraged bets in cryptocurrency derivatives and the speed at which forced selling can amplify price swings. Some analysts say continued outflows from spot products and heightened macro uncertainty could lead bitcoin to test support in the high $50,000s.