Bitcoin News Today: Crypto Market Slumps 7.3% as Bitcoin and Ethereum Drop Amid Fed Uncertainty

The cryptocurrency market experienced a broad sell-off on August 1, 2025, with no major coin registering gains in the past 24 hours. The total market capitalization dipped 7.3% to $3.83 trillion, while trading volume stood at $163 billion. Bitcoin (BTC) declined 2.3% to $115,555, and Ethereum (ETH) fell 4.8% to $3,673. Dogecoin (DOGE) saw the largest drop at 7.5%, trading at $0.2061, followed by Solana (SOL) with a 6.5% decline to $169. On-chain data from CryptoQuant revealed a major profit-taking event in late July, the third such spike in the current bull cycle, as large investors cashed out above the $120,000 level [1].

The broader market sentiment was influenced by the U.S. Federal Reserve’s decision to hold interest rates steady, amid growing concerns over inflation and potential trade tariffs. Douglas Colkitt, an Initial Fogo contributor, noted that the Fed’s internal debate over its rate-holding stance has introduced uncertainty into the market, increasing the appeal of decentralized assets like Bitcoin. Mike Cahill, CEO of Douro Labs, added that in a fragmented macroeconomic environment, Bitcoin’s low policy correlation and asymmetric upside make it an attractive strategic asset [2].

Analysts highlighted a 46% probability that BTC could reach $150,000 by the end of the year, while a 30% chance exists that it could fall back to $100,000 before September. Ethereum, expected to remain more volatile than BTC, has a 35% chance of hitting $3,000 by the end of September. The volatility gap between ETH and BTC widened in July, from 24% to 30%, reflecting renewed investor interest in Ethereum-related projects [3].

Meanwhile, U.S. BTC spot ETFs recorded outflows of $114.83 million on Wednesday, breaking a previous inflow trend. Among the funds, Ark&21Shares saw the largest outflow at $89.92 million, while BlackRock recorded the most inflow at $18.62 million. In contrast, U.S. ETH spot ETFs continued their record-breaking streak, with $17 million in inflows on Thursday. BlackRock and Fidelity were the top performers, while Grayscale reported a $6.8 million outflow [4].

Institutional activity remained a key factor in the market’s direction. Coinbase announced it had increased its Bitcoin holdings by 2,509 BTC in Q2 2025, surpassing Tesla to become one of the top 10 public companies holding Bitcoin. Strategy, the investment firm backed by Michael Saylor, launched a $4.2 billion at-the-market (ATM) equity program for its preferred shares, with part of the proceeds expected to be used for additional Bitcoin purchases [5].

Despite the recent downturn, some market observers remain cautiously optimistic. James Toledano of Unity Wallet expects Bitcoin to trade sideways in the short term, but a rise in inflation expectations or renewed institutional inflows could spark a new upward move. Charley Cooper of Ava Labs emphasized that while the Fed is delaying rate cuts, the eventual decision will likely be bullish for crypto, with the potential for one or two rate cuts remaining a strong possibility for the remainder of the year [6].

Looking ahead, Bitcoin is currently trading near critical support levels. A break below $115,000 could push it toward $113,000, while a recovery back to $118,696 would indicate a reversal in the short-term trend. The same dynamics are playing out with Ethereum, which is testing its $3,640 support level after falling from a high of $3,874. The crypto fear and greed index has dipped into the neutral zone, signaling early signs of market caution [7].

Source:

[1] https://cryptonews.com/news/why-is-crypto-down-today-august-1-2025/