Although Bitcoin had maintained relative stability in recent weeks, it plunged below the $114,000 mark between August 2 and 3, 2025, amid a sharp market correction influenced by external geopolitical factors. The cryptocurrency price fell to lows near $113,000 to $114,250, marking one of the most significant corrections in several months and reaching levels unseen since mid-June. This decline represented a 2.6% drop within a short time frame and placed Bitcoin approximately 6.5% below its all-time high of $122,800 recorded on July 14, 2025. Technically, the price breached a recent three-week consolidation range, raising concerns about potential further declines toward the $111,000 support level should a rebound fail to materialize.
Bitcoin’s sharp dip below $114,000 signals a critical breakdown from recent stability, hinting at further declines ahead.
The primary catalyst for this sudden downturn was the announcement of a tariff executive order by former President Trump, imposing new tariffs ranging from 19% to 39% on countries including South Africa, Switzerland, Taiwan, and Thailand. This geopolitical move triggered widespread sell-offs across stock and cryptocurrency markets, intensifying market uncertainty and prompting a risk-off sentiment among investors. Consequently, cryptocurrency derivatives markets experienced a wave of liquidations, with long positions exceeding $700 million being forcibly closed during the drop below $115,000. Combined liquidations for Bitcoin and Ethereum totaled approximately $863 million, reflecting the magnitude of the volatility episode. Approximately $900 million in long positions were liquidated across the broader crypto market during this period, underscoring widespread investor caution.
This liquidation cascade affected roughly 158,000 traders, mainly those holding long bets anticipating further price appreciation, thereby exacerbating downward pressure. While Bitcoin suffered a notable price decline, it proved relatively resilient compared to altcoins such as Solana and Hyperliquid, which experienced losses exceeding 5%. Bitcoin’s subsequent price bounce above $115,000 suggests a degree of underlying stability within the leading cryptocurrency, although the broader market sell-off underscores interconnected risks across crypto assets when confronted with major geopolitical shocks.
From a technical perspective, Bitcoin’s failure to maintain its consolidation range introduces risks of further downside, with support near $111,000 remaining critical. The ongoing liquidation pressure may amplify volatility in the short term, warranting cautious monitoring of market developments. Overall, these events highlight the sensitivity of cryptocurrency markets to macroeconomic and geopolitical disruptions, emphasizing the importance of risk management amid uncertain trading environments.
