Three Factors Behind Crypto Market's Recent Decline

The crypto market declined after a recent 3.97% weekly gain due to regulatory setbacks, leveraged position shakeouts, and macroeconomic jitters. The SEC postponed rulings on Solana ETF proposals, cooling optimism around the altcoin. Overleveraged Bitcoin positions were wiped out, leading to $162.9 million in BTC liquidations. Inflation data also contributed to the pressure, causing Bitcoin to dip below $118K and correlation with the Nasdaq to jump.

The crypto market experienced a significant decline after a recent 3.97% weekly gain, driven by regulatory setbacks, leveraged position shakeouts, and macroeconomic jitters. The U.S. Securities and Exchange Commission (SEC) postponed rulings on Solana ETF proposals, dampening optimism around the altcoin. Overleveraged Bitcoin positions were wiped out, leading to $162.9 million in BTC liquidations. Inflation data also contributed to the pressure, causing Bitcoin to dip below $118K and increasing its correlation with the Nasdaq.

The crypto market's sharp decline on August 14 resulted in over $1 billion in liquidations within 24 hours. According to Coinglass data, liquidated long positions accounted for over $872 million of total liquidations, with shorts accounting for the remainder [1]. The release of the July 2025 U.S. Producer Price Index (PPI) on August 14 appears to be a significant catalyst for the market downturn. The PPI report showed a larger-than-expected increase in wholesale prices, climbing 0.9% for the month and 3.3% over the past year [1].

Ethereum (ETH) saw the highest total liquidations over the 24-hour period, with $272.29 million in long and $74.17 million in short positions being wiped out. Bitcoin (BTC) followed with the next highest 24-hour liquidations, with $164.64 million in long liquidations and $13.16 million in short liquidations [1]. The Aug. 14 market crash is said to have hit the mysterious whale Aguila Trader hard. According to Lookonchain, the trader was liquidated for 18,323 ETH ($83.56M), bringing his losses to more than $37 million and "leaving him with only $330K in his account" [1].

The push to launch a U.S.-listed Solana ETF has hit another pause. The SEC has postponed its decision on multiple proposals, adding fresh uncertainty. Despite strong industry optimism, the SEC’s final decision to approve or deny the products remains uncertain. The SEC has used its full allowable extension for the current review cycle, pushing the deadline for a final decision to October 16, 2025 [2].

Solowin Holdings and Antalpha are launching a $100 million Bitcoin quantitative fund that uses data-driven, algorithmic trading strategies to invest in Bitcoin. The fund is aimed at institutional investors and targets a total of $100 million in assets under management. Solowin, a US-based fintech company listed on NASDAQ, is partnering with Antalpha, a Singapore-based digital asset manager [3].

The crypto market's recent volatility underscores the need for investors to remain vigilant and diversified. The regulatory environment remains unpredictable, and market shocks can occur rapidly. Investors should stay informed and adjust their strategies accordingly.

References:
[1] https://api.news.bitcoin.com/wp-json/bcn/v1/post?slug=more-than-1-billion-in-leveraged-bets-wiped-out-whale-trader-loses-83m-in-eth-liquidation
[2] https://crypto.news/solana-etf-stalls-as-sec-delays-decision-on-proposals/
[3] https://www.ainvest.com/news/solowin-antalpha-launch-100m-bitcoin-quantitative-fund-2508/