Crypto Market Drops: $750M Liquidated as Bitcoin, Ethereum, and Altcoins Tumble

The cryptocurrency market entered August with a sharp downturn, wiping out over $750 million in leveraged positions within 24 hours.

Triggered by a combination of macroeconomic shocks and intensified bearish sentiment, major tokens like Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA) plummeted, pulling total crypto market capitalization down by 4% to $3.1 trillion.

According to Coinglass, long positions accounted for the vast majority of liquidations, nearly $701 million, indicating a sweeping exit of bullish traders amid growing uncertainty. The average market Relative Strength Index (RSI) fell to 35.4, a signal of weakening momentum, while open interest in crypto derivatives dropped to $193 billion.

U.S. Tariffs and Fed Outlook Trigger Risk-Off Sentiment

Driving the market retreat was renewed concern over the global economic outlook. The U.S. Federal Reserve’s continued pause on interest rate cuts, keeping rates at 4.25% to 4.50%, has dampened investor risk appetite.

Simultaneously, the White House imposed new tariffs on goods from India, Brazil, South Korea, and South Africa, including a steep 50% tariff on copper, raising fears of disrupted crypto hardware supply chains.

With inflationary pressure expected to rise by up to 3%, safe-haven assets like bonds gained favor, draining liquidity from speculative markets like crypto. This compounded selling pressure, causing sharp pullbacks across top altcoins, with Dogecoin, Solana, and Cardano suffering the steepest drops.

Whale Wallets Reactivate, Retail Traders Capitulate

Adding to the anxiety, on-chain data revealed the sudden movement of 250 BTC, worth nearly $30 million, from miner wallets untouched since 2010. These legacy transactions, though rare, often signal broader market changes and triggered further speculation about insider activity or early investor exits.

Meanwhile, short-term Bitcoin holders showed signs of capitulation. Data from CryptoQuant showed over 223,000 BTC flowed into short-term wallets last month, reflecting a shift from long-term accumulation to rapid profit-taking.

Traders like AguilaTrades suffered devastating losses, with over $40 million in liquidations on Hyperliquid, underscoring the dangers of overleveraged positions in turbulent markets.

As the market navigates macro headwinds and investor sentiment cools, traders are bracing for continued volatility. With bearish positions on the rise and altcoin season on hold, the coming weeks may test the resilience of even the most seasoned crypto investors.