Bitcoin crashed below $77,000 on May 18, triggering $657 million in leveraged liquidations across cryptocurrency markets in a single 24-hour period -- the largest cascade since the March 2025 deleveraging event. The selloff snapped six consecutive weeks of inflows into spot Bitcoin ETFs, with weekly net outflows of $1.039 billion led by Fidelity's FBTC (-$412 million) and Grayscale's GBTC (-$285 million).
The crash was precipitated by the April CPI and PPI shock, which pushed 30-year Treasury yields above 5.1% and triggered a broad rotation out of risk assets. Ethereum fell 14% to $2,850, Solana dropped 18% to $142, and the total crypto market capitalization declined from $3.1 trillion to $2.65 trillion in less than a week. The crypto Fear and Greed Index plummeted to 22 ('Extreme Fear'), its lowest since the FTX collapse in November 2022.
What happened
The liquidation cascade followed a classic pattern: leveraged long positions accumulated during the six-week ETF inflow streak were liquidated as prices fell through key support levels. Bitcoin dropped through the $80,000 level -- a psychologically significant threshold -- triggering automated stop-losses and margin calls. Binance, Bybit, and OKX accounted for 78% of total liquidations, with the largest single position a $12.8 million Bitcoin long on Bybit.
The ETF outflow data was particularly striking. Spot Bitcoin ETFs had attracted $6.2 billion in net inflows over the prior six weeks, building cumulative inflows to $58.7 billion since their January 2024 launch. The $1.039 billion weekly outflow was the second-largest on record, surpassed only by the $1.4 billion outflow during the March 2025 banking scare. BlackRock's IBIT was the only major ETF to record inflows during the week, adding a modest $23 million.
Why it matters
The crash tests the thesis that institutional adoption through ETFs has made Bitcoin less volatile and more resilient to macro shocks. While ETF infrastructure has improved market access and liquidity, the $1 billion outflow demonstrates that institutional money is not sticky during risk-off events. The correlation between Bitcoin and the Nasdaq 100 reached 0.78 during the selloff, the highest in 12 months, undermining the diversification narrative.
The event also highlights the persistent risk of leverage in crypto markets. Despite regulatory efforts to reduce excessive leverage, the $657 million liquidation indicates that significant speculative positioning remains. Open interest in Bitcoin perpetual futures fell 24% in three days, suggesting the deleveraging was swift but painful.