Crypto Chaos: Massive Liquidations Triggered by Bitcoin’s Sudden Price Drop

Bitcoin plunged below $113,000, marking its steepest drop since July 10, 2025. Over $700 million in liquidations hit the crypto market in just one day. Bitcoin’s dominance soared above 62% as the Fear and Greed Index fell. On August 1, 2025, Bitcoin’s price plunged below $113,000 for the first time since July 10, sparking significant market upheaval. This sharp decline triggered a wave of forced liquidations across cryptocurrency derivatives exchanges, resulting in over $700 million in liquidated positions within just 24 hours. Nearly 161,000 traders had their positions forcibly closed, leading to losses exceeding $423 million among long position holders and approximately $85 million among short sellers. The largest single liquidation occurred on the ETH/USDC pair on Binance, amounting to $4.45 million. Major cryptocurrencies like Bitcoin and Ethereum bore the brunt of these liquidations, with positions worth around $161 million and $265 million respectively being closed. Meanwhile, Bitcoin’s dominance in the crypto market rose significantly, surpassing 62%, highlighting its resilience as altcoins experienced even steeper losses. Investor sentiment has turned cautious, as reflected by the Fear and Greed Index dropping nine points to 51 over the past 24 hours, signaling growing market apprehension. 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. These contributed to reduced capital inflows, with new investments into the crypto sector dropping noticeably during 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 to traders locking in profits, further fueling the sell-off. Analysts highlight that if support around $112,000 is lost, prices could see additional downside risk towards $106,000 in the near term. During this turbulence, altcoins experienced larger percentage losses than Bitcoin, underlining the increased risk-off sentiment among investors.