TL;DR
- Bitcoin fell nearly $3,000 from Monday’s $65,600 high, briefly reaching $63,000 as roughly $700 million in leveraged positions were liquidated.
- South Korea’s Kospi plunged about 11%, while the U.S. Senate postponed the Crypto Clarity Act, weakening risk appetite before the Federal Reserve decision.
- Ether dropped below $1,900 and the crypto market lost $80 billion, as derivatives data showed bearish taker volume, negative funding and capital outflows.
Bitcoin’s relief rally unraveled abruptly after the cryptocurrency reached a multi-day high near $65,600 on Monday. Within hours, sellers pushed BTC down almost $3,000 to roughly $63,000, its lowest level in 10 days, before a modest rebound toward $63,400. The rejection transformed a geopolitical relief bounce into a sharp market-wide reversal. Around $700 million in leveraged positions were liquidated as momentum flipped, while Bitcoin’s market capitalization fell to approximately $1.72 trillion. The speed of the decline left traders confronting how quickly optimism can disappear when liquidity remains fragile across crypto markets.
External shocks deepen the crypto market reversal
South Korea provided one of the clearest external shocks. The Kospi plunged about 11%, marking one of its worst sessions in years as semiconductor shares collapsed and global risk assets weakened. A regional equity crash rapidly spilled into cryptocurrencies and other speculative markets. Nasdaq 100 futures declined 0.70%, while gold and silver also moved lower, diminishing appetite for risk around the world. At the same time, the U.S. Senate postponed consideration of the Crypto Clarity Act to prioritize Russia sanctions legislation and federal nominations, adding regulatory disappointment just before lawmakers approach their Aug. 8 recess.
Altcoins absorbed even heavier losses. Ether fell below $1,900 after reaching a two-month peak near $1,980 a day earlier, while XRP and SOL posted declines of similar magnitude. HYPE dropped around 8%, and FET, NEAR, WLD, SHIB, PI and BEAT suffered deeper damage. The selloff erased roughly $80 billion from the total cryptocurrency market in one day. Aggregate capitalization fell from about $2.33 trillion to $2.25 trillion, confirming that Bitcoin’s rejection was not isolated but instead triggered broad deleveraging across large caps and more speculative tokens alike as investors rushed toward safer positioning.
Derivatives indicators reinforced the shift toward caution. Short positions represented 51.5% of taker futures volume, while the top 25 cryptocurrencies recorded negative open interest-adjusted cumulative volume delta for the first time in at least three weeks. Bearish market orders replaced the bullish positioning visible during the previous rebound. Funding rates turned negative for ETH, SOL, XRP and TRX, although Bitcoin funding remained near neutral and implied volatility stayed close to recent lows. With the Federal Reserve decision approaching, the market now faces macroeconomic, regulatory and technical uncertainty at precisely the same moment for global investors.
