Why is the crypto market falling? Bitcoin and Ethereum suffer heavy losses, Get Liquidated surges, analysis of macro pressure and unusual on-chain movement | August 1 dynamics

On the first trading day of August, the crypto assets market experienced a large-scale dumping, with the total market capitalization plummeting by 6.6% to $3.8 trillion in a single day. Bitcoin's price fell below $116,000, Ethereum dropped below $3,700, and mainstream alts fell by about 5%. Over $629 million in holdings were badly liquidated, and the fear and greed index plummeted. This article will delve into the core reasons behind the fall of Bitcoin and Ethereum, including the sudden shift in Fed interest rate expectations, the impact of new tariff policies, the movement of long-dormant wallets, and panic selling by short-term holders.

Macroeconomic pressures intensify: High interest rate expectations and tariff shocks become the fuse

The recent deep correction in the crypto assets market is mainly due to the suddenly escalating macro pressures. Strong U.S. economic data has forced the market to adjust its expectations, believing that the high interest rate environment will last longer, significantly reducing the possibility of interest rate cuts this year. This shift has significantly weakened the attractiveness of high-risk crypto assets such as Bitcoin and Ethereum, with funds accelerating towards safe-haven assets like bonds.

What exacerbates the situation is the new tariff policy that officially took effect in the United States on August 1, which has heightened market concerns. The White House announced a 25% tariff on goods imported from India and imposed tariffs of up to 50% on key raw materials such as copper. This policy could potentially raise the short-term consumer price index by 2.1-3% and may severely disrupt global supply chains, particularly in industries closely related to cryptocurrency mining and mining hardware manufacturing. Countries such as Brazil, South Korea, and South Africa have also been targeted for additional tariffs. President Trump has confirmed this new sanction measure, which involves hundreds of billions of dollars in annual trade flows. The macro risk in the cryptocurrency market has suddenly increased, leading to a spread of risk-averse sentiment among investors.

On-chain anomalies raise concerns: Ancient Bitcoin wallets awaken and short-term holders cut losses

In addition to macro factors, abnormal activities on the chain have further shaken market confidence. On July 31, five miner wallets, which had been dormant for over 15 years and could be traced back to April 2010 (the early days of Bitcoin), were suddenly activated, transferring a total of 250 Bitcoins (worth nearly $30 million) to two new addresses. Although such movements of "ancient Bitcoins" are uncommon, they have historically been viewed by market participants as signals of potential trend changes, especially with the recent frequent activities of Bitcoin holders, involving the movement of funds from wallets worth billions of dollars, raising concerns about future selling pressure.

At the same time, Bitcoin short-term holders are showing signs of panic selling. Market analyst Darkfost's data shows that a large number of investors who recently bought Bitcoin are cutting losses and exiting. Exchange data indicates that on July 15, over 50,000 Bitcoins were in a state of floating loss, and as of July 25, more than 37,000 Bitcoins were still held "underwater." CryptoQuant analyst Maartunn also pointed out that over 223,000 Bitcoins have been transferred from long-term holders' wallets to short-term holders' wallets in the past month, which may be the result of profit-taking or adjustments in investor strategies, but it also increases the short-term selling pressure in the market. On-chain data from the crypto asset market shows that the chips are loosening.

Market indicators deteriorate comprehensively: Get Liquidated surge, momentum exhaustion

Market data clearly reflects the severity of this dumping:

• Total market capitalization of Crypto Assets: evaporated by 6.6% in one day, falling to $3.8 trillion.
• Main Cryptocurrency Performance:
  • Bitcoin Price: fell 2.4%, reported at 115,354 USD.
  • Ethereum Price: down 4.1%, at 3,702 USD.
  • Solana, XRP, Cardano: all fell by about 5%, dragging down the overall alts sector.
• Market Sentiment: The Crypto Assets Fear and Greed Index fell by 6 points in a single day, dropping to 75 (still in the "Greed" range but significantly cooling off).
• Get Liquidated Amount: According to Coinglass data, the total liquidation amount across the network surged to 629 million USD in the past 24 hours, an increase of 45% compared to the previous day.
• Technical Indicators:
  • The average Relative Strength Index (RSI) has dropped to 35.4, indicating that the upward momentum of major tokens is generally exhausted.
  • The total open interest across the network has decreased by 3% to $193 billion, indicating that funds are withdrawing from leveraged positions.

Conclusion: The recent big dump in the crypto assets market is the result of multiple negative factors resonating together. The Fed's hawkish stance has strengthened the expectation of high interest rates extending, while the new tariff policy has raised concerns over inflation and supply chains, constituting major macro pressures. On-chain, the ancient Bitcoin wallet movements and panic dumping by short-term holders (panic selling) further undermined market confidence, leading to a deterioration of technical indicators and widespread Get Liquidated positions. Investors need to closely monitor subsequent macroeconomic data (especially CPI and Fed statements), global trade policy trends, and changes in large on-chain holdings, as these will be key signals to determine whether Bitcoin and Ethereum trends can stabilize and when alts will rebound. As market volatility increases, risk management is crucial.