Crypto Bloodbath: Bitcoin Crashes Below $108,000 as Altcoins Follow

The sharp correction dragged the total crypto market capitalization down to $3.74 trillion after a 3.23% daily decline, erasing gains built up earlier this month.

The sudden downturn has raised fresh doubts about whether the market can sustain its momentum heading into September. Bitcoin’s 3.56% daily loss leaves it down 7.61% over the past week, while Ethereum’s 4.31% drop deepens its seven-day losses to over 10%.

$571 Million in Liquidations as Bulls Get Wiped Out

The selloff was fueled in part by cascading liquidations across major exchanges. In the past 24 hours alone, $571.52 million worth of leveraged positions were wiped out. Longs made up the overwhelming majority, with $482.15 million erased compared to $89.37 million in short liquidations.

Ethereum traders bore the biggest brunt of the carnage, with $180.35 million in liquidations, followed closely by Bitcoin at $158.26 million. Solana and XRP weren’t spared either, suffering $44.20 million and $24.91 million in liquidations. Altcoins grouped together added another $46.90 million in losses, proving that no corner of the market was immune.

Heatmap Shows ETH at the Center of the Storm

Liquidation heatmaps reveal that Ethereum was at the epicenter of the latest crash. Heavy leverage piled up during its recent rally has now been flushed out, leaving ETH traders exposed to rapid downside swings. Bitcoin’s position as the second-most liquidated asset underscores just how unprepared the market was for the latest correction.

Macroeconomic Pressures Weigh on Crypto

Beyond technical factors, macroeconomic conditions are adding to the pressure. Fresh data from the U.S. Bureau of Economic Analysis showed personal consumption expenditures (PCE) rising 0.5% in July, with the PCE price index climbing 0.2% month-on-month and 2.6% annually. While in line with expectations, the figures reinforced the view that inflation remains sticky, making it unlikely that the Federal Reserve will lower interest rates in the near term.

High interest rates have been a consistent headwind for risk assets, particularly cryptocurrencies. With borrowing costs elevated, liquidity in the market is thinner, leaving leveraged traders more vulnerable to sharp swings.

Bitcoin Struggles at $107K, Ethereum Tests $4,200

The immediate focus for traders is whether Bitcoin can defend support above $105,000, a level many see as a psychological threshold. A decisive break lower could invite another wave of panic selling. For Ethereum, the $4,200 region is emerging as a crucial line of defense. Failure to hold this level could expose ETH to further downside, potentially dragging it back toward $4,000.

Is the Market Resetting for a Rebound?

Despite the pain, some analysts argue that the liquidation wave may ultimately be healthy for the market. By flushing out excessive leverage, Bitcoin and Ethereum could be setting the stage for a more stable consolidation period. Historically, mass liquidations have often preceded sharp rebounds as the market resets with less speculative pressure.

Still, sentiment remains fragile. Retail investors, already rattled by the downturn, may hesitate to re-enter until clear signs of recovery emerge. Institutional players, on the other hand, may view the dip as an opportunity to accumulate at lower prices, potentially laying the groundwork for a rebound in the weeks ahead.

What’s Next for Crypto Investors

Looking forward, the interplay between macroeconomic policy and crypto market structure will remain key. With the Fed unlikely to pivot on rates in the near term, volatility is expected to remain elevated. Bitcoin must reclaim $110,000 to restore bullish confidence, while Ethereum needs to break back above $4,300 to signal strength.

Until then, traders will likely face choppy waters as the market digests both macroeconomic uncertainty and the aftermath of one of the largest liquidation events in weeks.

The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

The post Crypto Bloodbath: Bitcoin Crashes Below $108,000 as Altcoins Follow appeared first on Coindoo.