The cryptocurrency market started the fresh week on a sharp downturn, with more than $500 million in long positions wiped out amid rising macroeconomic concerns and renewed uncertainty around U.S. monetary policy.
Bitcoin price was down 2.3% over the past 24 hours early on Monday, at around $115,494 after hitting a fresh all-time high of $124,496 last week, its fourth record this year. At one point, the token dipped as low as $114,706 before retracing to $116,055 at the time of writing this report. Ethereum slid 4% to $4,283.15, retreating after nearing its $4,800 record last week.
Both assets sold off after hotter-than-expected July wholesale inflation data fueled doubts over a potential Federal Reserve rate cut in September. Also, several large altcoins were falling. XRP dropped 3.8% and Solana was down 6%. Popular memecoin Dogecoin fell 5.2%.
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The selloff triggered a wave of forced liquidations, as 133,643 traders were wiped out in the past 24 hours, totaling $576.35 million, according to Coin Metrics. That included $123 million in bitcoin liquidations and $178 million in ether liquidations, as traders were forced to sell assets at market prices to cover leveraged positions.
Investor sentiment was further dampened by Treasury Secretary Scott Bessent, who stated that the U.S. government’s strategic bitcoin reserve, established by President Donald Trump in March this year, will be limited to forfeited bitcoin assets, as officials seek “budget-neutral” ways to expand holdings.
“We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up,” he said.
His words, however, contradict market expectations formed after U.S. President Donald Trump’s March executive order, which called for “budget-neutral strategies” to grow the reserve. That order, signed on March 6, established a strategic Bitcoin reserve and a separate digital asset stockpile funded initially with cryptocurrency seized in criminal cases.
The broader crypto market tracked the declines. The CoinDesk 20 index fell 3.7%, while crypto-related stocks also dropped: Bitmine Immersion slid 8%, newly listed exchange Bullish fell 7%, and both Coinbase and Circle lost 2%.
Commenting on the sharp slump in the price of Bitcoin as well as other crypto assets, market analyst at XS, Antonio Di Giacomo, said,
“Bitcoin’s recent pullback after reaching an all-time high highlights the significant impact of macroeconomic indicators on the cryptocurrency market. Short-term volatility contracts with a backdrop of rising institutional adoption and increasingly sophisticated corporate strategies”.
Several analysts predict that moving forward, the most likely drivers for crypto prices this week will be comments from Federal Reserve chair Jerome Powell at the Jackson Hole Symposium, alongside minutes from the Fed’s most recent meeting.
Traders are now looking ahead to the Federal Reserve’s Jackson Hole symposium later this week and Thursday’s jobless claims data for fresh signals on policy direction.
However, many analysts view the pullback as a healthy consolidation rather than a sign of deeper trouble. Despite Friday outflows, crypto ETFs saw strong weekly inflows, $547 million into bitcoin funds and a record $2.9 billion into ether funds, marking ETH’s 14th consecutive week of inflows.
For now, the August slump is seen as a cooldown before September, when macro risks and Fed decisions may once again take center stage in shaping the crypto rally.