Bitcoin News Today: Bitcoin and Ethereum Plunge Amid Rate Uncertainty and Options Expiries

The cryptocurrency market faced a sharp downturn on August 2, 2025, with Bitcoin (BTC) and Ethereum (ETH) leading the decline amid intensified selling pressure and bearish sentiment. The total crypto market capitalization dropped nearly 4%, falling to $3.74 trillion from $3.87 trillion in early Asia trading hours [1]. BTC fell below $115,000, losing 3%, while ETH tumbled over 6% to $3,600. Altcoins such as XRP, BNB, Solana (SOL), and Cardano (ADA) lost 7–12%, and meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe Coin (PEPE) also plunged 10% [1].

The downturn was driven by a combination of macroeconomic developments and technical market events. U.S. core Personal Consumption Expenditures (PCE) inflation rose to 2.6% year-over-year, and Consumer Price Index (CPI) data accelerated to 2.7%. The Federal Reserve left interest rates unchanged at 4.25–4.50%, with Chair Jerome Powell noting the impact of tariffs on inflation. The CME FedWatch tool indicated only one 25-basis-point rate cut is expected by December, adding to market uncertainty [1]. Meanwhile, Donald Trump’s comments about the Federal Reserve raised further concerns about policy direction [1].

Bitcoin and Ethereum options expiries also contributed to the selloff. Deribit’s $5.72 billion BTC options and $1.35 billion ETH options expired on the same day, increasing volatility as traders closed or liquidated positions. BTC’s price fell below the max pain level of $116,000, and Ethereum experienced similar downward pressure [1].

Institutional selling was evident as well. Spot Bitcoin ETFs recorded $114.8 million in outflows, with Fidelity’s FBTC and ARK 21Shares’s ARKB losing significant assets. Analysts noted that capital was rotating out of crypto, particularly among institutional players, with CoinShares reporting $175 million in total Bitcoin fund outflows [1]. Analyst Ali Martinez predicted $107,000 as a critical support level for Bitcoin, which was broken during the selloff [1].

The selloff triggered massive liquidations, with CoinGlass reporting nearly $1 billion in total liquidations in the previous 24 hours. Over 200,000 traders were affected, and the largest single liquidation reached $13.79 million on Binance. Altcoins such as SOL, XRP, and DOGE were among the most liquidated, with nearly $900 million in long positions and $100 million in short positions wiped out [1].

On-chain signals also indicated increasing pressure to take profits. Glassnode noted that over 90% of Bitcoin’s supply remained in profit, but the metric’s cumulative mean +1 standard deviation level was at 91%, signaling a potential for further selloffs. The Coinbase Premium Gap turned negative, indicating weakening demand in the U.S. market, while the Kimchi Premium remained negative, showing Asian traders were shorting Bitcoin [1].

The broader market reaction reflected deepening pessimism, as the Crypto Fear & Greed Index fell from 72 to 65, showing declining bullish sentiment [1]. Ethereum’s price confirmed a “death cross” on its hourly chart, a bearish pattern often associated with prolonged declines [2]. Smaller altcoins and memecoins saw even more severe declines, with XRP dropping below $3 and Pump.fun reporting a 90% drop in revenue [3].

Despite the severe selloff, some analysts argue that Bitcoin and Ethereum may be approaching oversold levels. The RSI for BTC dropped below 30, and ETH’s RSI hit 22, both indicating potential for a near-term rebound [4]. However, analysts caution that a recovery is not guaranteed, as macroeconomic uncertainty remains a key headwind [4].

High interest rates and U.S. trade policy developments continue to weigh on market stability. The combination of reduced liquidity and geopolitical concerns has pushed investors away from risk assets like crypto, at least for now [4]. The market is in the early stages of a deeper correction, with no clear signs of a bottom yet.

Investors are advised to remain cautious, as the market is currently defined by high volatility, heavy selling pressure, and mixed macroeconomic signals. The crypto market may still face further declines before any meaningful recovery can begin [4].

Source:

[1] CoinMarketCap, https://coinmarketcap.com/community/articles/688cf736a1f30c0dc5a8f71e/

[2] The Coin Republic, https://www.thecoinrepublic.com/2025/08/01/crypto-market-crash-why-btc-eth-xrp-sol-doge-memecoins-are-falling-today/

[3] U.Today, https://u.today/ethereum-confirms-hourly-death-cross-whats-next-for-eths-price

[4] 99Bitcoins, https://99bitcoins.com/news/presales/why-is-crypto-down-today-rsi-oversold-hinting-at-rebound-potential/