Market overview
The crash that occurred from August 1 to 3, 2025, led to Bitcoin's price falling below $113,000 amid global market disruptions. This 13% correction coincided with significant declines in stock markets, resulting from unexpected economic weakness. Despite the short-term pain it caused, these fluctuations revealed important macro correlations that traders need to monitor.
Key catalysts
The pressures in traditional markets were the main cause of the cryptocurrency sell-off, including these pressures:
• Surprise announcement from Trump about new tariff policies
• Disappointing July jobs report (73,000 vs. 200,000+ as expected)
• Panic in the bond market as government bond yields hit record lows
• Disappointing financial results from Apple and Amazon
Implications for trading
More than a billion dollars in cryptocurrency trading positions were liquidated in just 24 hours, as leveraged traders faced margin call requirements. Despite ongoing short-term volatility, the "Project Crypto" initiative by the U.S. Securities and Exchange Commission (SEC) may provide regulatory clarity supporting institutional participation. Bitcoin's resilience below $120,000 indicates strong support levels despite the prevailing market uncertainty.
It is advisable to reduce leverage, monitor U.S. inflation data (currently at 2.8% for core consumer prices), and prepare to capitalize on potential opportunities as institutional capital reassesses its entry points.$BTC