Bitcoin fell sharply on August 26, dropping below $110,000 for the first time in over six weeks, as a broader sell-off gripped global cryptocurrency markets. The decline was accompanied by a wave of liquidations and substantial outflows from digital asset investment products, signaling a shift toward risk-averse positioning by investors. The price of Bitcoin slid to $109,300 during early trading hours before stabilizing slightly above that level by mid-day. The move represents a decline of nearly 7 percent over the previous 24 hours and comes amid heightened volatility across digital asset markets.
Market analysts pointed to a sudden capital rotation away from risk assets as the primary driver, following an earlier rally that saw Bitcoin briefly touch $117,000 over the weekend. Data from multiple crypto exchanges indicated that over $900 million in leveraged positions were liquidated across the market during the 24-hour span. Of that amount, Bitcoin-related positions accounted for approximately $277 million. The sell-off was accelerated by a large-scale transaction involving an estimated 24,000 BTC, which contributed to price pressure and triggered margin calls in the derivatives markets.
Ethereum and other major altcoins also experienced sharp declines. Ethereum dropped nearly 8 percent in the same time frame, falling to around $5,500. Liquidations in Ethereum futures alone exceeded $320 million. Other tokens including Solana, XRP, and BNB posted losses ranging between 5 and 9 percent as market sentiment turned decisively negative. The broader downturn followed a brief surge in prices after comments from Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium on August 23.
Market sentiment shifts following Powell’s Jackson Hole speech
While Powell indicated that the central bank remained open to adjusting interest rates in response to evolving economic conditions, financial markets appeared to reverse course in the absence of concrete policy signals. In parallel with falling prices, institutional flows into crypto investment vehicles recorded notable outflows. Spot Bitcoin exchange-traded products (ETPs) registered net withdrawals of approximately $523 million, while Ethereum-focused products saw outflows totaling around $422 million.
Combined, crypto ETPs experienced nearly $1.6 billion in outflows within a 48-hour period, according to data from multiple fund managers and exchanges. On-chain analytics reflected a broader distribution of holdings among wallet addresses, suggesting that short-term investors were exiting positions. The data also showed a decrease in net inflows to major crypto wallets, a signal commonly associated with reduced market confidence.
Activity on the Bitcoin network remained stable in terms of transaction volume, although average transaction size declined modestly. Support levels for Bitcoin are currently being tested near $105,000. Technical analysts are closely monitoring the $100,000 mark as a key psychological and structural level, with further weakness potentially inviting continued outflows from leveraged positions. No official statements have been issued by major trading platforms or investment firms regarding the recent sell-off.
Crypto investors respond to macroeconomic uncertainties
In equity markets, stocks of companies with high exposure to digital assets also registered losses. Shares of major cryptocurrency exchanges, mining companies, and blockchain-focused funds declined between 3 and 6 percent on Tuesday, tracking the broader downturn in digital assets. The price correction in cryptocurrencies comes amid a broader cautious tone in global financial markets, as investors weigh macroeconomic signals ahead of key inflation and employment data due later this week. While digital assets have outperformed many traditional sectors year-to-date, recent movements suggest heightened sensitivity to capital allocation trends and liquidity conditions.
The total market capitalization of cryptocurrencies dropped by nearly 5 percent over the 24-hour period, falling to just under $2.2 trillion, according to market trackers. Trading volumes spiked across major centralized exchanges as investors moved to reduce exposure and unwind leveraged positions. Bitcoin has gained over 40 percent in 2025 so far, but the latest drawdown underscores the volatility still inherent in the asset class. The coming days are expected to reflect further adjustments as markets continue to digest macroeconomic developments and reprice risk accordingly. – By CryptoWire News Desk.