The crypto market lost $170B in market cap over Aug 4-5, 2025, dropping from $3.82T to $3.65T. Key drivers:
1. Macroeconomic Issues: Weak US jobs report signaled recession, sparking risk-off sentiment. New US tariffs on Mexico, Canada, and China added uncertainty. Japan’s Nikkei crashed >12% after a rate hike, impacting global markets.
2. Geopolitical Tensions: Israel-Iran conflicts and US military moves drove investors to safe assets, with $900M in crypto positions liquidated.
3. Market Factors: $560M in leveraged positions liquidated, including $153M in Bitcoin. Bitcoin fell 4% to $114K, breaking $115K support. Altcoins like Solana dropped 10%. Over $600M in Bitcoin/Ethereum ETF outflows occurred. Weak earnings from Coinbase (-16%) and Galaxy Digital (-5.4%) hurt sentiment.
4. Technical/Sentiment: Bitcoin’s RSI hit oversold (27.18), suggesting a potential bounce. Fear & Greed Index at 62 shows cautious optimism. X posts call it a "healthy correction" post-July rally.
Outlook: Volatility persists with economic reports and geopolitics as key risks. Bitcoin support at $110K-$116K. Investors should stay cautious and avoid over-leveraging.
