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The cryptocurrency sector encountered a significant downturn on August 1, 2025, with more than $700 million in liquidations reported in just 24 hours across Bitcoin and other prominent assets.
As per Coinglass, long positions represented $707 million, underscoring the harsh obliteration of optimistic trades across Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA), Dogecoin (DOGE), and more.
Total market capitalization fell by 3.95% to $3.7 trillion, while Bitcoin decreased by 3.1% to $114,892 and Ethereum plunged 6.1% to $3,620. Altcoins experienced steeper declines—Cardano dropped 8.5%, XRP fell 7.5%, and Solana decreased by over 6.9%. The Crypto Fear and Greed Index declined to 60, reflecting diminishing investor confidence.
BTC's value records a sell-off in lower timeframes as observed in the daily chart. Source: BTCUSD on Tradingview
U.S. Tariffs and Fed Stance Fuel Risk-Off Sentiment in Bitcoin and Altcoins
The sell-off aligns with new U.S. tariffs and the Federal Reserve’s aggressive monetary policy. President Trump’s administration imposed tariffs of up to 50% on crucial inputs, escalating global trade frictions.
The Fed also maintained interest rates at 4.25–4.50% for the fifth consecutive time, indicating sustained high-rate conditions that reduce risk willingness.
These situations prompted a pullback from speculative assets like crypto. The cryptocurrency market’s relative strength index (RSI) dropped to 35.4, and total open interest decreased by 3% to $193 billion, signifying broader market frailty.
Whale Dynamics and Crypto Liquidations Intensify the Strain
On-chain activity has increased the worry. Five previously inactive Bitcoin miner wallets from 2010 suddenly transferred 250 BTC (≈$30M), raising alarms about potential sell pressure. Simultaneously, short-term holders are continuing to capitulate, offloading BTC at a loss.
High-profile liquidations have amplified the situation. Well-known trader AguilaTrades reportedly lost nearly $40 million on Hyperliquid after a leveraged BTC position collapsed. Other high-risk players, including James Wynn, also faced multi-million-dollar liquidations.
Conversely, shrewd traders like 0xCB92 gained by shorting ETH with 20x leverage, earning over $3.7 million, highlighting the extreme volatility and high-stakes nature of the current market.
Amid the turmoil, long-term investor sentiment remains cautious but intact. Nevertheless, with macro pressures, whale wallet movements, and leverage-induced volatility, the path ahead continues to be challenging for crypto bulls.
Cover image from ChatGPT, BTCUSD chart from Tradingview
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