Bitcoin News Today: Whale-Driven Exodus to ETH Sparks Bitcoin's $110K Slide and $284M Liquidation Wave

Bitcoin fell below $110,000 in early August 2025 amid growing investor caution driven by uncertainty around Federal Reserve policy and heightened liquidity risks. The drop, which marked its lowest level in over six weeks, followed a $11 billion sell-off by a long-dormant whale that had held Bitcoin for five years. The massive sale was directed toward Ether (ETH) spot and futures markets on the decentralized exchange Hyperliquid, triggering a sharp correction in Bitcoin's price. As a result, more than $284 million in long positions were liquidated, highlighting the fragility of leveraged positions amid volatile market conditions [1].

Despite the price drop, demand for Bitcoin futures surged to an all-time high, reflecting sustained trader engagement. Bitcoin futures open interest reached 762,700 BTC, a 13% increase from two weeks earlier, underscoring the continued appetite for leveraged exposure. However, the rising open interest did not signal broad optimism. The 8% annualized premium for Bitcoin futures—up from 6% the previous week—remained below the 10% threshold that historically indicated strong bullish sentiment, suggesting traders remained cautious [1].

The bearish sentiment was further reinforced in the options market, where put options traded at a 10% premium over calls. This imbalance reflected a market psychology skewed toward downside risk, especially after Bitcoin dropped by nearly $6,050 in two days. Analysts attributed the shift in positioning to whale activity, with large holders rotating assets from Bitcoin to Ethereum. This trend, while not unusual in the long term, added to the short-term uncertainty and amplified the bearish tilt of the options market [1].

The market correction also exposed deeper liquidity concerns. The Bitcoin perpetual futures funding rate, which typically ranges between 8% and 12% in neutral conditions, dropped back to 11% following a brief uptick. This shift, combined with $1.2 billion in net outflows from U.S.-listed spot Bitcoin ETFs in early August, underscored the cautious positioning among institutional and retail investors. As traders reassessed their exposure, the Bitcoin options market braced for a $13.8 billion monthly expiry on August 23, which could serve as a key inflection point for market sentiment [1].

Meanwhile, the Federal Reserve’s evolving stance on monetary policy added to the uncertainty. Fed Chair Jerome Powell’s speech at the Jackson Hole symposium signaled a potential shift in the central bank’s approach, emphasizing the rising downside risks to the labor market. In response, major brokerages including Barclays and BNP Paribas revised their rate cut forecasts, now expecting a 25-basis-point cut in September. Markets priced in an 87% probability of a rate cut at the September FOMC meeting, up from 75% before Powell’s speech. However, the timing and magnitude of the cut remained subject to incoming economic data, particularly labor market reports and inflation readings [2].

The convergence of Fed policy uncertainty and Bitcoin market dynamics created a volatile environment. While the $110,000 level held as a key psychological threshold, the broader market remained exposed to further corrections, especially if leveraged long positions continued to unwind. Analysts emphasized that the path to a recovery would depend on renewed inflows into spot ETFs and a stabilization in investor sentiment, particularly as global growth outlooks remained mixed [1].

Source:

[1] Bitcoin futures demand rises even as BTC sells off (https://cointelegraph.com/news/bitcoin-futures-demand-rises-even-as-btc-sells-off-what-gives)

[2] Major brokerages pivot to Sept Fed rate cut on Powell's labor warning (https://www.reuters.com/business/major-brokerages-pivot-sept-fed-rate-cut-powells-labor-warning-2025-08-25/)