The crypto market is showing bearish signals today, August 6, 2025, due to several factors:
1. Macroeconomic Pressures: Recent U.S. tariff announcements, including President Trump's modified "reciprocal" tariffs on dozens of countries, have triggered a risk-off sentiment across global markets. This has led to a 7% drop in the overall crypto market, with Bitcoin briefly falling to $115,000, Ethereum down 3.7% to $3,700, and Solana slipping 4.5% to $172. These tariffs strengthen the U.S. dollar, reducing the appeal of risk assets like cryptocurrencies.
2. Technical Indicators: Bitcoin has broken below key support levels, such as the $118,859 mark, accelerating selling pressure toward $114,500. The MACD histogram at -630 signals strong bearish momentum, and a narrowing 7-day price range of 3.2% suggests a volatility squeeze, potentially leading to further downside. The Relative Strength Index (RSI) for Bitcoin and other major coins indicates oversold conditions in some cases, but selling pressure persists.
3. Liquidation Cascade: Over $560 million in leveraged crypto positions were liquidated in the past 24 hours, with $153 million from Bitcoin futures alone. This forced selling has created a feedback loop, pushing prices lower as traders settle debts at market prices.
4. Market Sentiment and ETF Outflows: The Fear & Greed Index is at 62 ("Greed"), reflecting cautious optimism, but recent outflows from U.S. Bitcoin spot ETFs ($114.83 million on July 31) signal waning short-term confidence. This contrasts with Ethereum ETFs, which saw $17 million in inflows, indicating mixed sentiment across assets.
5. Broader Market Influence: A sell-off in global stocks and a tech market downturn are impacting risk assets, including crypto. Bitcoin’s decline to around $113,231.41 aligns with these broader market dynamics, as investors rotate capital into safer assets amid uncertainty.
Despite these bearish signals, some analysts note potential for recovery. Institutional buying, such as MicroStrategy’s $4.2 billion Bitcoin acquisition plan, and long-term on-chain data suggesting BTC accumulation could stabilize prices. A Federal Reserve rate cut, with 60% odds by October, might also boost institutional flows into crypto. For now, key support for Bitcoin is at $116,240, with a break below potentially targeting $110,000.
Disclaimer: This is not financial advice. Always do your own research before trading.
