Bitcoin News Today: Fed Tariffs and Skew Fears Spark Crypto Sell-Off Below $114K

Bitcoin, Ethereum, and XRP experienced significant price declines over the past 24 hours, with mid-cap cryptocurrencies showing relative strength amid broader market uncertainty. The total crypto market cap fell below $3.88 trillion, its lowest level in over two weeks, as investors liquidated long positions worth over $530 million in response to macroeconomic concerns. Bitcoin dropped to a two-week low near $113,500, triggering over $116 million in forced liquidations within an hour, while Ethereum and XRP fell by approximately 5% each, according to CoinGlass data [1]. The sell-off came as major U.S. stocks also declined, with the Nasdaq Composite down 1.2% at the time of writing [3].

Several factors contributed to the heightened risk aversion. First, the U.S. announced new 50% import tariffs on 407 aluminum- and steel-related products, raising concerns about supply chain disruptions and inflationary pressures [1]. The news intensified worries about potential Federal Reserve tightening in response to inflation, undermining the bullish sentiment that had driven crypto prices to record highs earlier in the week. Additionally, reports of an SEC investigation into Alt5 Sigma, a company tied to Donald Trump’s World Liberty Financial, sparked concerns about regulatory scrutiny in the crypto space. World Liberty raised $550 million through public token sales, and Trump’s stake reportedly earned him $57.4 million in June [1].

Derivatives markets reflected the growing bearish sentiment, with Bitcoin’s 30-day options delta skew rising to 12%, the highest level in four months. This indicator typically oscillates between -6% and +6% under neutral conditions, but readings above 10% signal extreme fear among investors [1]. The last time the delta skew reached similar levels was in April when Bitcoin fell below $74,500. However, that decline was followed by a 40% rebound in the following month, suggesting potential volatility ahead [1]. Analysts remain cautious, noting that while the current sell-off reflects short-term macroeconomic pressures, it does not necessarily signal the end of the longer-term bull market for Bitcoin [1].

Market participants are now closely watching the upcoming Jackson Hole economic policy symposium, where Fed Chair Jerome Powell will address market expectations for rate cuts in September. The outcome of these discussions could significantly influence liquidity flows and, by extension, crypto prices [5]. Meanwhile, onchain analytics firm Glassnode noted a growing divergence between institutional demand and price action. Despite declining volume and weakening onchain fundamentals, ETF inflows remained strong, with Ethereum ETFs recording a record $2.9 billion in weekly inflows [3]. However, recent outflows from the largest ETF, BlackRock’s iShares Bitcoin Trust, have raised questions about the sustainability of institutional support [3].

Amid the volatility, mid-cap cryptocurrencies have outperformed their blue-chip counterparts. Altcoins such as XRP, Ethereum, and others experienced sharper declines than Bitcoin, but some investors view the pullback as a healthy cooldown rather than a bear market. The broader crypto market remains in a consolidation phase, with Bitcoin testing key support levels near the 50-day and 100-day moving averages [5]. If Bitcoin continues to fall below $112,000, further declines to the $105,000–$107,000 range could become more likely [5].

Source:

[1] Why is Bitcoin crashing and will $112K be the final bottom? (https://cointelegraph.com/news/why-is-bitcoin-crashing-and-will-112k-be-the-final-bottom)

[2] Bitcoin sinks to $115000 after hitting its newest record, as ... (https://www.cnbc.com/2025/08/18/crypto-market-today.html)

[3] Bitcoin sell pressure 'palpable' as BTC bid support stacks ... (https://cointelegraph.com/news/bitcoin-sell-pressure-palpable-btc-bid-support-stacks-at-105k)

[4] Everything Blockchain (OTC: EBZT) Sets Out to Build the “ ... (https://www.morningstar.com/news/globe-newswire/9514594/everything-blockchain-otc-ebzt-sets-out-to-build-the-index-of-blockchain-speculation-in-the-us-public-markets)

[5] Bitcoin Price Crash Fears Gather As Crypto Braces For A ... (https://www.forbes.com/sites/digital-assets/2025/08/19/wall-street-issues-serious-66-trillion-crypto-warning-as-price-crash-fears-hit-bitcoin-ethereum-and-xrp/)