Bitcoin absorbs a $1.25B blow – Is a supply shock loading?

• Bitcoin absorbed a $1.25B long liquidation with minimal price disruption.
• BTC’s structure remains intact, hinting at a potential supply squeeze.

Bitcoin [BTC] is still flexing serious muscle despite all the volatility. 

Cast your mind back to the post-“Liberation Day” dump in early April. Bitcoin shed 10.5% that week, closing at $76,191 and tagging a five-month low. 

Fast forward to now, and even with macro headwinds back in play (thanks to fresh tariff noise), a 3.79% intraday pullback barely registers. In fact, according to AMBCrypto, this might just be the tip of the iceberg. 

With another high-leverage long wiped out and the market absorbing it like a sponge, Bitcoin’s resilience could be setting the stage for a classic supply squeeze.

The long squeeze that didn’t break BTC

No doubt, that intraday dip shook out a ton of leveraged longs.

On-chain data from CryptoQuant flagged a sharp liquidation event: 2,560 BTC, or around $275 million, were squeezed out during the swift drop from $111,699 to $107,270 on the 23rd of May.

Notably, it was the first major long squeeze in over a month, dragging BTC down 3.79% in a single session.

The message is clear: In high-volatility conditions, stacking 20x–40x longs is a textbook recipe for liquidation.

This move was a stark reminder of how fast leveraged positions can get nuked. Moreover, it showed how quickly prices can whipsaw in response.

But if you thought that was enough to scare the big players, think again. 

Lookonchain data spotted a whale aping in with a monster 40x long with 11,588 BTC worth $1.25 billion which was set to be liquidated at $105,108.

As BTC ranged tightly between $106k and $109k, the whale opted to close manually, injecting a fresh wave of 11k+ BTC into the market.

And yet, despite the size of that unwind, BTC didn’t flinch. Could this be stealth accumulation at work, setting the stage for a looming supply shock?

Bitcoin’s bull case builds

May’s data highlights a brewing supply squeeze, but it’s important to break down the numbers carefully.

Spot ETFs gobbled up 52,000 BTC, effectively locking those coins away from circulation. 

Exchange reserves continued to decline near the $107K price level, reducing the supply of BTC available for trading. In total, approximately 70,000 BTC exited exchanges this month alone, further tightening liquidity.

Combine that with sovereign players stacking big – the UAE is stacking both on the buy and mining front, and Singapore’s 68% BTC allocation signals serious conviction. 

And the real eye-opener? BlackRock’s iShares Bitcoin Trust (IBIT) alone added 44,000 BTC to its holdings this month, highlighting massive institutional demand quietly piling in.

So, the $1.25 billion long wipeout? It barely made a dent.

In summary, Bitcoin appears to be quietly building a high-conviction base above $100k – one that could serve as the launchpad for the next major leg up.