The cryptocurrency market started the week on shaky ground, sliding lower as global economic worries sparked more than half a billion dollars in forced liquidations.
Bitcoin (BTC) slipped 1.1% to $116,394.87 after hitting a record high of $124,496 just days earlier, its fourth peak of the year. Ether also lost ground, sliding 2.5% to $4,354 after nearly touching its previous all-time high of around $4,800 last week.
The downturn followed hotter-than-expected July inflation figures, which created doubt about whether the Fed will move ahead with a rate cut next month.
The sell-off quickly escalated into widespread liquidations as investors locked in profits. Data from CoinGlass shows that in the last 24 hours, 123,836 traders were forced to unwind positions worth a combined $530.79 million. Of that, nearly $124 million was tied to long BTC trades and $184 million to Ether positions.
These liquidations occur when leveraged traders must sell at market prices to cover losses, which typically drives prices down further.
Market sentiment weakened further after Scott Bessent, the U.S. Treasury Secretary, stated that the government’s strategic BTC reserve, created by President Donald Trump in March, will only consist of crypto seized through legal forfeitures. He added that the administration is exploring “budget-neutral” ways to expand holdings, which disappointed some investors who hoped for more aggressive accumulation.
The slump extended beyond BTC and Ether. The CoinDesk 20 index, which tracks the wider crypto landscape, dropped 1.2%. Crypto-related equities also had a mixed session, with Bitmine Immersion dropping 5.4%, while newly listed exchange Bullish slid 8.9%. On the other hand, Coinbase gained 1%, and Galaxy Digital rose 2.2%.
Looking ahead, traders are focused on the Federal Reserve’s annual economic conference in Wyoming. Any signals from policymakers about upcoming interest rate decisions could have a strong impact on crypto markets. Traders are also closely monitoring Thursday’s release of jobless claims.
Last week’s sharp rise in BTC and Ether caught some traders off guard, as August is historically a sluggish month for digital assets. Many expected broader economic pressures to overshadow enthusiasm around institutional interest in crypto until the Fed’s September meeting. Still, analysts view the latest pullback as a healthy pause rather than a sign of crisis.
Crypto-focused exchange-traded funds are helping provide stability. Despite outflows on Friday, BTC ETFs recorded $547 million in net inflows for the week, while Ether funds attracted a record $2.9 billion, their 14th straight week of positive momentum.
BTC is currently hovering near break-even for the month, while Ether remains up 15 percent. Crypto companies like Bit Mining Ltd. (NYSE: BTCM) will be watching how the coming weeks affect the price trajectory of major cryptos.
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