Crypto markets dropped 6.6% on August 1, driven by new U.S. tariffs, triggering $629 million in liquidations. Discover why crypto is down today.

  • Crypto market fell 6.6% on August 1 with total market cap dropping to $3.8 trillion and $629 million in liquidations

  • Bitcoin declined 2.4% to $115,354 while Ethereum dropped 4.1% to $3,702, with major altcoins falling 5-7%

  • New U.S. tariffs taking effect August 1 include 25% on Indian goods and 50% on critical materials like copper

  • Long-dormant Bitcoin wallets from 2010 moved 250 BTC worth $30 million, raising market concerns

  • Short-term Bitcoin holders are selling at losses with over 37,000 BTC still underwater as of July 25

The cryptocurrency market experienced a sharp decline on August 1, with the total market capitalization falling 6.6% to $3.8 trillion. The sell-off affected all major cryptocurrencies and triggered widespread liquidations across trading platforms.

Bitcoin $BTC fell 2.4% to $115,354, while Ethereum $ETH declined 4.1% to $3,702. Major altcoins also posted losses, with Solana, XRP $XRP , and Cardano each dropping approximately 5-7%. The Crypto Fear and Greed Index dropped 6 points to 75, reflecting increased market anxiety.

Over $629 million in cryptocurrency holdings were liquidated in the past 24 hours, representing a 45% increase from the previous day. Technical indicators showed weakening momentum, with the average crypto market relative strength index falling to 35.4. Market open interest also decreased 3% to $193 billion.

💥New Tariff Policy Creates Market Pressure

The White House announced new tariffs taking effect August 1, including a 25% tariff on goods from India and a 50% tariff on critical materials such as copper. These tariffs target more than 70 countries with rates ranging from 15% to 40%.

The new trade policies include a baseline tariff rate of 10% for all trade partners, with countries maintaining trade surpluses facing higher rates of 15%. Canada specifically faces an increased tariff rate from 25% to 35%, effective immediately.

The U.S. Trade Office estimates these tariffs could increase consumer prices by 2.1-3% in the short term. Industries tied to crypto mining and hardware manufacturing may face particular disruption due to tariffs on critical materials.

President Trump confirmed the new penalties cover billions in annual trade flows. Only select trading partners negotiated agreements before the August 1 deadline, with Mexico receiving a 90-day extension.

💥Historic Bitcoin Wallets Become Active

On July 31, five Bitcoin miner wallets from April 2010 moved 250 BTC worth nearly $30 million to new addresses. These wallets had remained untouched for over 15 years, dating back to Bitcoin’s earliest mining days.

Such movements from legacy wallets are rare and often viewed as potential market shift indicators. The activity follows a month of increased movement from long-term Bitcoin holders, with billion-dollar wallet transactions raising concerns about future selling pressure.

Short-term Bitcoin holders are showing signs of capitulation, with many recent buyers now selling at losses. Exchange data reveals over 50,000 BTC were trading below purchase prices on July 15, with more than 37,000 BTC still underwater as of July 25.

CryptoQuant analyst Maartunn 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 changing investor positioning.

Bitcoin currently trades near the $115,000 support level after falling out of its two-week consolidation range between $117,261 and $120,000. A failure to hold this support could push the price to $111,187.

The SEC announced “Project Crypto,” an initiative to modernize securities regulations for blockchain integration. Despite this positive development, the market continued its downward trend, showing persistent uncertainty in the crypto sector.

💥👉💥Final Thoughts

Crypto is down today due to the implementation of new U.S. tariffs, which have added pressure to the market, alongside concerns over the movement of long-dormant Bitcoin wallets. These factors, combined with short-term holders selling at a loss, have created increased uncertainty and volatility.

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