Although Bitcoin had demonstrated resilience with its highest monthly close in July, the cryptocurrency plunged below $114,000 on August 1, 2025, marking a three-week low and a 2.6% intraday decline that placed it approximately 6.5% beneath its recent all-time peak of $122,800. This downturn unfolded amid heightened market volatility triggered by a U.S. tariff executive order, which imposed levies ranging from 19% to 39% on imports from several nations, including South Africa, Switzerland, Taiwan, and Thailand. The tariffs intensified investor uncertainty, catalyzing widespread sell-offs across both cryptocurrency and traditional stock markets. Stock markets in Asia also traded lower amid these tariff fears, reflecting the broader economic concerns. The overall trend remains uncertain, with analysts closely watching whether Bitcoin will continue to consolidate or break lower amid these pressures, highlighting the current market volatility. The recent developments underscore the importance of scalable blockchain technologies like Kaspa’s BlockDAG that aim to enhance transaction speed and throughput.
The immediate impact on Bitcoin was pronounced, as the price retreated from the consolidation range of $115,000 to $118,000 observed in the preceding weeks. Market participants observed a critical support threshold near $111,000, which, if breached, could signal further downside momentum. The volatility was further amplified by a surge in liquidations within the derivatives markets, where leveraged long positions faced substantial losses. In total, over $863 million in long positions tied to Bitcoin and Ethereum were liquidated during this period, with Bitcoin alone accounting for more than $700 million as its price dipped below $115,000.
Approximately 158,000 traders were affected within a 24-hour window, incurring combined liquidation losses exceeding $630 million mainly from long positions. Notably, the sharpest sell-offs between $113,155 and $114,000 triggered over $200 million in Bitcoin-specific liquidations. These figures underscore the vulnerability of leveraged trading strategies amid rapid price declines, highlighting the systemic risks inherent in speculative crypto markets during periods of macroeconomic stress.
Derivatives markets, including CME Bitcoin futures, closely tracked the spot price movements, filling previous discrepancies and reflecting the ongoing trader risk exposure. Meanwhile, altcoins experienced even steeper declines, with assets such as Solana and Hyperliquid dropping more than 5%, reinforcing a pervasive risk-off sentiment across digital asset classes. The confluence of geopolitical tensions and economic policy shifts therefore disrupted what had been a relatively stable phase for Bitcoin, injecting fresh uncertainty into its near-term price trajectory.
