Bearish bets on major tokens lost nearly $600 million on Sunday as traders were caught offside following President Donald Trump’s announcement of a U.S. strategic reserve for several cryptocurrencies. The unexpected declaration sent shockwaves through the market, shaking up positioning and triggering significant liquidations.
Sundays are typically marked with relatively lower liquidity, making for unusually high price jumps as it takes comparatively less capital to influence asset prices. In this context, Cardano’s ADA surged by 60% in the past 24 hours, with XRP and Solana’s SOL following closely behind, rising by 25% and Bitcoin (BTC) climbing by 9%.
The fallout from this volatility was pronounced in the futures market, where BTC-tracked futures incurred over $344 million in losses, leading the pack of liquidations. This was followed by $170 million in ETH-tracked futures liquidations. Futures tracking ADA, XRP, and SOL also saw considerable losses, with each experiencing over $70 million in liquidations—marking their highest levels since September 2024, according to Coinglass data.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This situation arises when traders cannot meet the margin requirements for their leveraged positions, indicating they lack sufficient capital to maintain their trades.
Unusually high liquidations can serve as a strategic indicator in trading, potentially pointing towards overbought conditions that could lead to reversals or profit-taking opportunities—a contrarian dataset worth considering. As a consequence, open interest, representing unsettled futures bets, has risen as much as 40% for XRP, ADA, and SOL, indicating that traders anticipate continued volatility.
In the immediate aftermath of Trump’s comments, Bitcoin (BTC) soared to over $93,000 during early Asian trading hours on Monday, reversing a portion of the losses experienced last week when prices fell to as low as $83,500 due to macroeconomic headwinds, including U.S. tariffs and heightened interest in safe haven assets like the yen and gold.
While some market analysts expected Bitcoin to retreat to the mid-$70,000 price levels, increasing short trades and an open interest bias suggested a potential downward trajectory. However, Trump’s announcement rekindled bullish expectations, at least in the short term. Traders remain cautious of a protracted rally until the associated plans become more concrete. Notably, the demand for Bitcoin options at the $100,000 level has resurfaced, as highlighted in a recent CoinDesk analysis.
