Meta description: Bitcoin dropped to a two-week low of $76,700 on May 18, triggering $661 million in crypto liquidations as bond yields spike and inflation fears hammer risk assets.
Focus keyword: bitcoin liquidations May 2026
Category: Markets (57)
The crypto market took a brutal hit on Monday, May 18, 2026, as Bitcoin slid to a two-week low of $76,711, dragging the broader market into a sharp selloff that wiped out $661 million in leveraged long positions across exchanges. Traders who had been positioned for a recovery rally found themselves on the wrong side of a macro-driven move that few saw coming.
What Triggered the Selloff?
The catalyst was a combination of factors that have been building pressure on risk assets for weeks. U.S. Treasury yields surged to multi-month highs, with the 10-year yield pushing past levels that historically signal a shift in capital allocation away from speculative assets like crypto and tech stocks.
Alongside the yield spike, hotter-than-expected CPI and PPI data released earlier in the week rattled expectations for Federal Reserve rate cuts in 2026. Markets had been pricing in at least two cuts before year-end, but fresh inflation prints have pushed those bets back sharply. When the prospect of cheaper money fades, so does appetite for high-risk trades.
Adding to the pressure were geopolitical concerns around U.S.-Iran tensions, which sent oil prices higher and knocked sentiment across global markets. Bitcoin, which had been trading just below $80,000 earlier in the month, broke through the key psychological support zone and triggered a cascade of automated liquidations across derivatives markets.
The Liquidation Data
According to data from CoinGlass, the $661 million in liquidations represented a 42% surge compared to the previous 24-hour period. Ethereum and Bitcoin suffered the most, with ETH falling roughly 10% to trade near $2,129.
Solana dropped more than 5%, and XRP followed suit. Smaller-cap tokens absorbed even heavier losses, with some altcoins giving back 10-15% of their recent gains in a matter of hours.
The crypto market’s total capitalisation fell to approximately $2.56 trillion, down 1.36% on the day, though the real damage was concentrated in the derivatives market where over-leveraged positions unwound rapidly.
Bond Yields: The Macro Force Reshaping Crypto
The relationship between rising U.S. Treasury yields and crypto performance has become increasingly direct in recent years. As yields rise, the opportunity cost of holding zero-yield assets like Bitcoin increases. Institutional investors who shifted allocations toward crypto during the low-rate environment are now re-evaluating those positions.
JPMorgan strategists noted earlier this month that Ethereum and altcoins would continue to lag Bitcoin without a meaningful DeFi revival, and Monday’s selloff appeared to validate that caution. Bitcoin’s market dominance edged higher even as BTC itself fell, suggesting capital concentration in the perceived safer bet within crypto.
Is the Bull Run Over?
Not necessarily. Bitcoin’s bull-bear cycle indicator had flipped green for the first time since March just days before the current selloff — a signal that longer-term momentum remains constructive even if short-term conditions are deteriorating.
The $76,000-$77,000 zone represents a significant technical support area that traders will be watching closely. A sustained break below $75,000 would likely trigger another wave of liquidations and force a reassessment of the broader bullish thesis heading into Q3.
On the institutional side, demand signals remain mixed but not outright bearish. Abu Dhabi’s Mubadala sovereign wealth fund had recently raised its Bitcoin ETF stake by 16% to $566 million, and Charles Schwab launched direct spot Bitcoin and Ethereum trading to its 35 million clients earlier in May — signals that structural adoption continues even as prices pull back.
What Traders Are Watching Next
Upcoming Federal Reserve communications will be critical. Any hint that policymakers are willing to tolerate higher inflation to support growth could reignite risk appetite across markets. A surprise dovish shift in forward guidance — even without an immediate rate cut — has historically been enough to trigger sharp recoveries in crypto prices.
Until then, traders are advised to watch position sizes carefully. The $661 million liquidation event is a reminder that leverage amplifies losses dramatically during macro-driven moves, and that Bitcoin’s recent recovery from its early-2026 lows has not been fully secured.
FAQ
Why did Bitcoin fall to $76,700 on May 18, 2026?
Bitcoin dropped to a two-week low on May 18 due to a combination of surging U.S. Treasury bond yields, hotter-than-expected inflation data, and rising geopolitical tensions around U.S.-Iran conflict. These macro factors reduced risk appetite across markets, triggering a wave of automated liquidations that pushed BTC lower.
How much was liquidated in the May 18 crypto selloff?
Approximately $661 million in long positions were liquidated across crypto exchanges during the May 18 selloff, a 42% increase from the previous day. Bitcoin and Ethereum suffered the largest losses, with ETH falling around 10% and BTC dropping to its lowest level in two weeks.
Will Bitcoin recover from the current dip?
Technical analysts point to $76,000-$77,000 as a key support zone. Bitcoin’s long-term cycle indicators remain constructive, and institutional demand — from entities like Mubadala and Charles Schwab’s newly launched crypto trading platform — continues to provide structural support. However, macro headwinds from bond yields and inflation could keep near-term pressure elevated.
*Sources: CoinDesk, Economic Times, Bloomberg, Mudrex Learn, CoinGlass data, Longbridge Financial*
