Why is crypto down today? Liquidations hit $629M as BTC, ETH, XRP dip

A broad sell-off hit the crypto market on the first day of August, with total market capitalization falling 6.6% to $3.8 trillion amid macroeconomic tensions.

Bitcoin (BTC) fell 2.4% to $115,354, while Ethereum (ETH) declined 4.1% to $3,702. Solana (SOL), XRP (XRP), and Cardano (ADA) each dropped by about 5%, dragging the altcoin sector lower. The Crypto Fear and Greed Index fell 6 points from the day before, now at 75.

Over $629 million in cryptocurrency holdings were liquidated in the last day, according to Coinglass data, a 45% increase from the previous day. Technical indicators also weakened. The average crypto market relative strength index dropped to 35.4, indicating waning momentum across major tokens. Additionally, the market’s overall open interest dropped 3% to $193 billion.

Tariffs, Fed outlook trigger sharp retreat in BTC, ETH, and altcoins

The recent decline can be attributed in large part to renewed macroeconomic pressure. The markets are now pricing in a longer period of high rates, which has reduced expectations for interest rate cuts due to strong U.S. economic data. This change has resulted in a decline in demand for riskier assets, such as cryptocurrencies, in favor of safer alternatives, such as bonds.

Adding to this is the launch of new U.S. tariffs that took effect on August 1. The White House announced a 25% tariff on goods from India and a 50% tariff on critical materials such as copper. These tariffs may disrupt global supply chains, especially for industries tied to crypto mining and hardware manufacturing. Other countries targeted include Brazil, South Korea, and South Africa.

The U.S. Trade Office estimates that the new tariffs could increase short-term consumer prices by 2.1–3%, creating a more risk-averse market. President Donald Trump, in a statement, confirmed the new penalties, which cover billions in annual trade flows.

Long-dormant wallets move and short-term BTC holders sell at a loss

Beyond the macro outlook, on-chain activity added to market unease. On July 31, five Bitcoin miner wallets from April 2010, untouched for over 15 years, suddenly moved 250 BTC, worth nearly $30 million, to two new addresses. These legacy wallets date back to Bitcoin’s earliest days, when few people were involved in mining.

Although rare, these movements are often regarded as potential markers of market shifts. They follow a month in which long-term holders have been very active, with billion-dollar wallet movements raising concerns about potential selling pressure in the future.

At the same time, short-term Bitcoin holders are showing signs of capitulation. Market analyst Darkfost reported on July 30 that many recent buyers are now selling at a loss. Based on exchange data, over 50,000 BTC were in the red on July 15, and more than 37,000 BTC were still underwater as of July 25.

CryptoQuant analyst Maartunn also noted a shift in Bitcoin supply from long-term to short-term holders. Over 223,000 BTC moved into short-term wallets in the past month, likely due to profit-taking or a change in investor positioning.