Bitcoin News Today: Cryptocurrency Market Hits $4.06 Trillion as Bitcoin Dominates and Altcoins Face Leverage Risks

The global cryptocurrency market reached a new record high of $4.06 trillion on August 7, 2025, driven by strong institutional interest and surging trading volumes that hit $180 billion in the previous 24 hours [1]. Bitcoin led the rally, peaking at $123,000 and accounting for 59.8% of the total market value. This dominance indicates a broader bullish sentiment in the market, with traders positioning for further gains ahead of the U.S. CPI report on August 7 [2].

Despite Bitcoin’s strong performance, certain altcoins are showing signs of vulnerability amid rising leverage and shifting market dynamics. The Altcoin Season Index has dropped to 34, signaling a reallocation of capital back toward top assets [4]. Among the most exposed are Ethereum (ETH), Ethena (ENA), and XRP, which face heightened liquidation risks due to imbalances in long and short positions.

Ethereum’s current price of around $4,300 has drawn heavy bullish leverage. Should the price fall 7% below $4,000, over $5 billion in long positions could be liquidated. A more severe 7% drop to $3,600 could trigger a $7 billion liquidation event, according to analysts [3]. Conversely, a 7% rally could lead to $2 billion in short position losses [1]. The concentration of liquidity in Ethereum has also left other altcoins lagging, raising concerns about the sustainability of the current trend.

Ethena (ENA), a rapidly rising altcoin, surged from $0.50 to $0.80 in August. However, if the price drops to $0.70 this week, long position holders could face losses exceeding $70 million. While short positions carry less risk, analysts caution that profit-taking between $0.80 and $0.90 may slow the short-term momentum [2].

XRP presents a different risk profile. Unlike most altcoins, where bullish positions dominate, XRP has seen a rise in bearish leverage. Ripple’s recent release of 1 billion XRP has added downward pressure, with technical indicators showing increased selling activity. A 8% rise to $3.50 could trigger $500 million in short position liquidations, while a 8% drop to $3.00 could result in a $370 million liquidation risk for long positions [4].

Analysts warn that excessive leverage across these altcoins could lead to sharp corrections if market sentiment turns or liquidity dries up. The current environment, while bullish, remains fragile. With Bitcoin continuing to attract capital, altcoin investors must remain cautious, particularly in markets where fundamentals are weak and volatility is high [6].

Source:

[1] Bitcoin News Today: Crypto Market Hits $4.06 Trillion as ... (https://www.ainvest.com/news/bitcoin-news-today-crypto-market-hits-4-06-trillion-bitcoin-dominance-stalls-altcoin-season-2508/)

[2] Crypto Rallies Into Key Inflation Report as Markets Eye US ... (https://news.bitcoin.com/crypto-rallies-into-key-inflation-report-as-markets-eye-us-cpi-for-next-move/)

[3] This Crypto Expert Thinks a 70% Bitcoin Crash Is Coming ... (https://www.ainvest.com/news/crypto-expert-thinks-70-bitcoin-crash-coming-panicking-2508/)

[4] Sequans Boosts Bitcoin Holdings with New Acquisition (https://m.economictimes.com/crypto-news-today-live-11-aug-2025/liveblog/123223005.cms)

[6] Ethereum Season Still Dominates: ETH Outperforms BTC ... (https://blockchain.news/flashnews/ethereum-season-still-dominates-eth-outperforms-btc-for-2-consecutive-quarters-altcoins-lag-per-total3-eth-signal)