The cryptocurrency market suffered a severe correction on August 1-2, 2025, with over $900 million in leveraged positions liquidated within 24 hours. According to Coinglass data, long positions accounted for $823 million of the wipeout as Bitcoin (BTC) tumbled 5.6% to $113,411, Ethereum (ETH) plunged 10.5% to $3,518, and altcoins faced deeper cuts – Cardano (ADA) fell 8.5%, XRP slid 10.2%, and Solana (SOL) dropped 6.9%.
The sell-off coincided with hawkish Federal Reserve policy maintaining interest rates at 4.25%-4.50% for the fifth consecutive meeting, coupled with new U.S. tariffs of up to 50% on key materials that escalated global trade tensions. Geopolitical risks intensified as President Trump deployed nuclear submarines toward Russian waters following threats from Moscow. A disappointing U.S. jobs report further eroded risk appetite, with the White House firing the report's author within hours of its release.
Technical indicators signaled broad weakness: total market capitalization fell 3.95% to $3.7 trillion, the Crypto Fear and Greed Index dropped to 60, and the market's RSI hit 35.4. On-chain activity revealed added pressure as five dormant Bitcoin wallets from 2010 moved 250 BTC (~$30 million), while high-profile traders like AguilaTrades suffered $40 million losses on leveraged BTC positions. Conversely, opportunistic shorts yielded massive gains, including one ETH short earning $3.7 million with 20x leverage.
Analysts warned of continued volatility, with Glassnode predicting accelerated sell-offs if BTC breaches $110,000. While some project potential dips to $80,000 by September, platforms like Myriad still assign a 53% probability of BTC reaching $125,000.
