Bitcoin's $1.88 Billion Liquidation Cascade: Jobs Report Crushes Rate Cut Hopes

Strong May jobs report doubles forecasts, fueling rate hike fears and triggering $1.7B in crypto liquidations; Bitcoin slides below $60K.

An unexpectedly robust US jobs report has triggered a violent repricing of interest rate expectations, sending Bitcoin spiraling below $60,000 and unleashing a cascade of forced selling that wiped out over $1.7 billion in leveraged positions across the crypto market.

The Labor Department's May employment data showed 172,000 new jobs were added — double the 85,000 analysts had forecast — while the unemployment rate held at 4.3%. The shock was immediate. Markets that had been pricing in the prospect of lower rates abruptly reversed course. On prediction platform Polymarket, the implied probability of a Federal Reserve rate hike by year-end jumped to 52%, while the CME FedWatch Tool put the odds at 42.7% for a move higher by December 2026. For Bitcoin and other risk-sensitive assets, the dream of imminent monetary easing evaporated.

Liquidations Overwhelm Exchanges

The price fall triggered a brutal chain reaction. Within 24 hours, exchanges executed forced liquidations exceeding $1.7 billion, with some estimates peaking as high as $1.88 billion. Long positions bore the brunt, accounting for roughly $1.41 billion of the total. Over 350,000 traders were caught offside. Bitcoin itself accounted for more than $534 million of the liquidated value.

The cryptocurrency touched an intraday low of $59,100 on the day of the report, before clawing back to trade around $63,796 — still nearly 50% below its all-time high of $126,000 reached in October 2025. The recovery represents just a modest bounce from deeply oversold territory. The Relative Strength Index (RSI) has fallen to 18.2, marking the most oversold condition in years, while the Crypto Fear & Greed Index plunged to 12 — deep in "Extreme Fear" territory.

Technical damage extended further: Bitcoin broke below its 200-week moving average for the first time since June 2022, and more than half of all circulating coins are now sitting on unrealized losses.

ETF Flows Tell a Tale of Two Days

The picture in institutional flows is mixed but ultimately bearish. On the day of the crash, US spot Bitcoin ETFs saw net outflows of $326 million, led by BlackRock’s IBIT which shed hundreds of millions. Only VanEck and Morgan Stanley reported negligible inflows. That rout came just one day after the ETFs had briefly snapped a 13-day losing streak, pulling in a modest $3.05 million — with IBIT alone contributing $48 million. But the macroeconomic headwind proved overwhelming. Total assets under management across the Bitcoin ETF complex have slumped from $104.3 billion in mid-May to roughly $80.4 billion.

Strategy Breaks a Four-Year Pledge

Adding to the psychological pressure, Strategy — the corporate Bitcoin behemoth formerly known as MicroStrategy — sold coins for the first time since 2022. Between May 26 and May 31, the company offloaded 32 Bitcoin, raising about $2.5 million to fund dividends on its preferred stock. The amount is negligible relative to its total holdings of 843,706 BTC, but the symbolic weight is heavy. The company is sitting on unrealized losses of over $12.7 billion on its Bitcoin book, and the sale marks a stark departure from its long-standing "hodl" strategy.

Capital Rotates Away from Crypto

Institutional money is rotating aggressively out of digital assets and into AI-related equities, while upcoming initial public offerings — notably SpaceX’s blockbuster listing on June 12 — are locking up liquidity. This rotation helps explain why even positive on-chain signals, such as the withdrawal of over 66,000 Bitcoin from exchanges on June 6, have failed to stem the selling.

For now, traders are watching the $55,000 support level — a zone that acted as a floor back in February — and the resistance just above $61,000. The next major catalyst arrives on June 16–17, when the Federal Reserve’s FOMC meeting will offer clarity on the trajectory of rates. Until then, the market remains firmly in the grip of extreme fear.