Significant Crypto Sell-offs Result in $754 Million Loss: Bitcoin, Ethereum, and Various Altcoins Lead the Descent in Market Value
The cryptocurrency market experienced a significant correction around August 1, 2025, with various macroeconomic and geopolitical factors contributing to the downturn.
In a surprising move, former President Trump's administration announced new tariffs on key materials, escalating global trade tensions. Simultaneously, disappointing U.S. economic data and disappointing earnings from major tech companies such as Apple and Amazon fueled panic in the traditional markets. As a result, government bond yields hit record lows, and the U.S. job market data reported only 73,000 jobs added, significantly lower than the expected 200,000+. These traditional market pressures led to a 13% Bitcoin price correction, with Bitcoin falling below $113,000 during August 1 to 3, resulting in over $1 billion in crypto trading positions being liquidated in a single day.
Regarding Federal Reserve policy, the Fed maintained its interest rates steady between 4.25% and 4.5%, signaling no immediate rate cuts. This decision disappointed investors who anticipated easier monetary policy. High interest rates generally lead investors to seek safer assets over riskier ones like cryptocurrencies, causing liquidity to drain from the digital asset market. This Fed stance was an important catalyst for Bitcoin’s price decline from near $122,000 down to around $115,120 on August 1.
The new U.S. tariff announcement likely added to the uncertainty and negative sentiment in global markets, indirectly affecting the crypto space as well. Together, the unfavorable macroeconomic environment, tight Fed policy, U.S. tariff shocks, and disappointing corporate earnings created a challenging risk-off environment for cryptocurrencies, triggering sharp sell-offs and forced liquidations among leveraged traders.
Key assets such as Cardano, XRP, and Solana saw significant drops, with Cardano falling 8.5%, XRP sliding 7.5%, and Solana losing over 6.9%. Notable traders like 0xCB92, James Wynn, and AguilaTrades faced multi-million-dollar liquidations, while prominent traders like AguilaTrades reportedly lost nearly $40 million on Hyperliquid after a leveraged BTC position collapsed.
Despite the chaos and macro headwinds, long-term investor sentiment remains watchful but intact. The total market capitalization of cryptocurrencies plummeted 3.95% to $3.7 trillion, with long positions accounting for $707 million in losses across major assets. The cryptocurrency market's relative strength index (RSI) fell to 35.4, and total open interest dropped 3% to $193 billion, indicating a broader market weakness.
Whale wallet movements, leverage-based volatility, and macro headwinds suggest a rocky road ahead for crypto bulls. However, the resilience of long-term investors remains a beacon of hope for the crypto market's recovery.
[1] CoinTelegraph, "Crypto Market Cap Drops $300 Billion as Bitcoin, Ethereum, and Solana Plummet," August 1, 2025.
[2] Bloomberg, "Fed Holds Rates Steady, Signaling Prolonged High-Rate Conditions," August 1, 2025.
Cryptocurrency investors faced further challenges as key altcoins like Cardano, XRP, and Solana suffered significant drops, following Bitcoin's 13% correction. This massive sell-off was part of a broader market downturn influenced by factors such as the Fed's unyielding stance on monetary policy, global trade tensions instigated by new tariffs, and disappointing economic data from major corporations.
