Weekend Crypto Crash Erases $290B as Bitcoin Tests Critical Support

$290 billion vanished from cryptocurrency markets over the weekend in a brutal selloff that caught traders off guard during thin trading conditions. Bitcoin plummeted to $74,674 while Ethereum touched $2,164 before finding support at levels not seen since spring 2025.

The weekend massacre wasn't confined to crypto. S&P 500 futures dropped 0.58% in pre-market trading, Nasdaq 100 futures fell 0.85%, and even precious metals retreated from record highs, with gold and silver each losing about 3.5%. The synchronized selloff across risk assets suggests something deeper than mere profit-taking was at play.

The Perfect Storm of Weekend Liquidity

Weekend crypto trading resembles a ghost town compared to weekday volumes, and this thin liquidity became a weapon against leveraged positions. Over $800 million worth of leveraged bets were force-closed by exchanges in 24 hours, with most being bullish long positions that got steamrolled.

Market-wide futures open interest crashed to $108.94 billion, the lowest since April, as traders fled leveraged positions. This represents a dramatic fall from the $223 billion peak reached in October, signaling a fundamental shift in risk appetite.

Ethereum bore the brunt of the liquidation cascade, with over $300 million worth of positions forcibly closed. Privacy coin DASH hemorrhaged 25% of its value over the week, while blockchain tokens Optimism, SUI, and Tezos all dropped more than 20%.

Fed Fears and the Warsh Factor

The selloff's timing coincided with growing uncertainty over Federal Reserve policy direction. Donald Trump's nomination of Kevin Warsh, considered one of the more hawkish contenders for Fed chair, sent ripples through markets already jittery about interest rate policy.

"The silver bubble well and truly popped on Friday after lenders upped their margin calls to speculators," noted Derren Nathan from Hargreaves Lansdown, connecting the precious metals retreat to broader risk-off sentiment triggered by the Warsh nomination.

This hawkish pivot matters for crypto because digital assets have historically moved inversely to interest rate expectations. Higher rates make risk-free government bonds more attractive relative to volatile cryptocurrencies, pulling capital away from speculative assets.

Derivatives Tell a Different Story

While spot markets cratered, derivatives positioning reveals a more nuanced picture. On CME, bitcoin futures opened at $77,730, creating a significant gap from Friday's close of $84,105. Markets often fill these gaps, suggesting potential for a bounce above $80,000.

But options flows paint a bearish picture. On Deribit, the $75,000 put option has become as popular as the $100,000 call, while puts at $80,000 and $70,000 strikes show significant buildup. This options positioning reflects genuine downside fears rather than mere technical selling.

Interestingly, some altcoins saw increased open interest during the selloff, possibly indicating traders shorting the decline. Solana, Dogecoin, SUI, Cardano, and Chainlink all experienced this pattern, suggesting sophisticated money may be positioning for further downside.

The Outlier That Defied Gravity

Amid the carnage, HyperLiquid'sHYPE token surged over 40% for the week, climbing 13% from Saturday's low of $27.50. This outlier performance came as traditional finance traders discovered crypto use cases in precious metals trading, highlighting how institutional adoption continues even during market stress.

Jupiter'sJUP token also showed resilience, rising 7.9% since midnight UTC after initially falling 25% over the weekend. These pockets of strength suggest the selloff was more about liquidity and positioning than fundamental crypto weakness.