On August 1, 2025, Bitcoin's price fell below $113,000 for the first time since July 10, leading to significant upheaval in the cryptocurrency market. This sharp decline triggered a wave of liquidations.
Volume of Liquidations in the Crypto Market
The price drop caused the liquidation of positions worth over $700 million in just one day. Approximately 161,000 traders faced forced closures, leading to losses exceeding $423 million among long position holders and around $85 million among short sellers. The largest single liquidation occurred on the ETH/USDC pair on Binance, amounting to $4.45 million.
Pressure on Bitcoin and Altcoins
Major cryptocurrencies like Bitcoin and Ethereum experienced significant losses, with positions worth approximately $161 million and $265 million respectively being closed. Bitcoin's dominance in the crypto market rose above 62%, while altcoins experienced even steeper declines.
Factors Contributing to Price Drop
Bitcoin's recent decline was driven by a combination of macroeconomic factors, including the U.S. Federal Reserve's decision to maintain high interest rates and tougher global regulatory developments. This led to reduced capital inflows, with new investments into the crypto sector noticeably dropping in late July and early August. Notably, August is historically one of Bitcoin's weakest months, with average declines ranging from 5% to 20% over the past decade. Technical factors also played a role: Bitcoin's failure to breach important resistance levels near $122,000 led traders to lock in profits, further fueling the sell-off. Analysts highlight that if support around $112,000 is lost, prices could face additional downside risk towards $106,000 in the near term.
With growing investor uncertainty reflected in the Fear and Greed Index, the cryptocurrency market is heading towards high volatility, with Bitcoin remaining in the spotlight.
