Bitcoin News Today: $1 Billion in Crypto Liquidations Triggered by August 2025 Price Reversal

Bitcoin’s sharp price reversal in August 2025 triggered a wave of leveraged liquidations, with over $1 billion in positions wiped out in a single 24-hour period, according to multiple reports [1][2][3]. The sudden drop followed the release of U.S. inflation and producer price index (PPI) data, which prompted a rapid sell-off. Bitcoin had climbed above $124,000 before plummeting below $118,000 within minutes, creating a flash crash scenario and forcing many leveraged traders out of their positions [2].

The bulk of the losses came from long positions, with more than $750 million in liquidations compared to about $140 million in short positions [1]. Ethereum was also heavily impacted, with $348.9 million in ETH leveraged positions being liquidated, making it the second-largest asset affected [1]. Major exchanges bore the brunt of the losses, with Bybit reporting $421.9 million in liquidations, Binance at $249.9 million, and OKX recording a notable ETH-USDT swap of $6.25 million [1][2].

Galaxy Digital, led by Mike Novogratz, reported that crypto leverage levels had reached near-bull market highs before the crash, contributing to the instability [2]. The firm noted the rapid price drop and its impact on both Bitcoin and major altcoins, signaling potential broader market risks [2]. QCP Capital analysts echoed this sentiment, calling the correction a “leverage flush” rather than a sign of a broader bear market, while emphasizing that the overall structural setup of the crypto market remains intact [3].

While the event highlighted the risks of overleveraging, some analysts remain cautiously optimistic about the long-term trajectory of the crypto market. Institutional adoption and growing decentralization are seen as key long-term fundamentals [2]. However, the episode also underscores the vulnerability of leveraged positions in an environment where macroeconomic data and monetary policy expectations can cause rapid and extreme price swings [3]. As such, the crypto market is now looking ahead to key labor data in September for further clarity on Federal Reserve policy [1].

The increasing influence of traditional financial indicators on crypto pricing has led to a more complex and interconnected market landscape. Traders must now navigate not only digital asset volatility but also broader macroeconomic trends and risk management considerations [3]. This latest liquidation event serves as a stark reminder of the systemic risks tied to leverage and the importance of prudent trading strategies.

Source:

[1] https://www.ainvest.com/news/1-billion-crypto-positions-liquidated-inflation-spikes-trigger-market-reversal-2508/

[2] https://bravenewcoin.com/insights/crypto-market-pullback-wipes-out-1b-in-leverage-but-analysts-see-healthy-correction

[3] https://www.thedefiant.io/news/markets/crypto-markets-fragile-amid-usd1b-liquidations-triggered-by-ppi-surprise