Crypto Liquidation Surges Past $700M as Bitcoin Drops Below $114K

2025-08-02

The crypto market was shaken as over $713 million in crypto liquidations hit the scene, following a sharp drop in Bitcoin’s price below $114,000.

This massive liquidation wave has left both retail and institutional traders reeling, especially those who had placed long positions expecting further upside after Bitcoin’s impressive monthly close at $115,750.

Despite growing institutional interest, the unexpected pullback highlighted the volatile nature of the crypto market and how macroeconomic shifts can quickly flip sentiment.

Crypto Liquidation Surges

Bitcoin price had been enjoying strong momentum in July, hitting record highs and closing the month with its highest-ever monthly close. But just days later, things took a sharp turn.

A sudden price drop to $113,756 triggered massive liquidations on major exchanges such as Binance and OKX. Long positions were particularly hit hard, as traders betting on continued gains found themselves caught off guard by a swift market reversal.

In parallel, Bitcoin futures open interest on the CME (Chicago Mercantile Exchange) fell 13% from its July highs, while the options market began to reflect fear, with the 30-day skew shifting from +3% to -1.5%, showing a spike in demand for downside protection.

Causes of Crypto Liquidation Surges

Several factors combined to create the crypto liquidation surges:

1. Macroeconomic Headwinds: New U.S. tariff proposals triggered global market anxiety, contributing to a general risk-off sentiment that spilled over into crypto.

2. Profit-Taking Surge: Investors locked in profits after a strong July, with an estimated $6–8 billion in realized gains. Much of this selling occurred OTC (over-the-counter), indicating large-scale, institutional activity.

3. Miners Join the Sell-Off: Bitcoin miners added to the pressure by selling off about 15,000 BTC, likely to take advantage of the recent all-time highs.

4. Negative Technical Indicators: Negative signals like the Coinbase premium flipping red and declining futures open interest suggested weakening market confidence.

Institutions Still Buying the Dip

Interestingly, even with this sharp downturn, institutions seem more bullish than ever. Metaplanet, a Japanese hospitality firm, revealed plans to raise up to $3.7 billion to supercharge its Bitcoin acquisition strategy.

The target is a jaw-dropping 210,000 BTC by 2027, up from their current 17,132 BTC stash. This fundraising move includes issuing two classes of perpetual preferred shares, each potentially worth $1.9 billion and offering annual dividends of up to 6%.

It’s a bold strategy that mirrors moves by other institutions like Strategy, which recently purchased $2.5 billion in BTC, and MARA Holdings, which raised $950 million through convertible notes, also aimed at crypto accumulation.

The surge in corporate buying has helped keep Bitcoin above the $100K mark, even in the face of heavy selling and liquidation activity.

Read Also: How to Buy Bitcoin (BTC)

Conclusion

While the $713 million in crypto liquidations may seem alarming, it’s part of the ebb and flow of a highly dynamic market.

Yes, macroeconomic fears and technical signals triggered a rapid sell-off, but at the same time, institutional demand is ramping up. Companies like Metaplanet are not just holding; they’re going all-in.

For everyday traders, this could be a reminder that volatility is part of the game. But for long-term believers, the fundamentals, especially institutional backing, remain strong.

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FAQ

What caused the $713 million crypto liquidation?

The liquidation was triggered by Bitcoin’s drop below $114,000 due to macroeconomic concerns (like new U.S. tariffs), a wave of profit-taking, miner sell-offs, and negative technical indicators.

Are institutions still interested in Bitcoin?

Yes. Companies like Metaplanet, Strategy, and MARA Holdings are continuing to invest heavily in Bitcoin, despite the short-term volatility.

Is now a good time to buy Bitcoin?

Some analysts suggest the current dip could be a buying opportunity, especially for institutions or long-term investors looking to accumulate at lower levels.