Why Bitcoin Crashed at End-of-July: CryptoQuant Reveals the Hidden Triggers
Bitcoin's late-July nosedive wasn't just another 'buy the dip' opportunity—it was a perfect storm of leveraged liquidations and miner capitulation. Here's what really happened.
Leverage Wipeout: Over $200M in long positions got vaporized as BTC breached key support levels. CryptoQuant data shows exchanges flooded with sell orders from margin traders getting rekt.
Miner Exodus: Hashprice hit 2025 lows, forcing old-gen rigs offline. The hashrate dip created a temporary supply overhang—just as ETF inflows slowed to a trickle.
Wall Street's Summer Vacation: Institutional players took profits ahead of August recess. Because nothing says 'hedge fund' like dumping crypto before Hamptons season.
Now the question: Was this the last shakeout before new ATHs—or proof that even Bitcoin can't escape traditional finance's seasonal whims?
Potential Triggers
The month of July, which marked the second half of the year, saw a spectacular BTC run that drove the asset to a new all-time high of just over $123,000. At the end of the month, however, Bitcoin experienced a significant drop, losing 7-8% of its value and falling to a multi-week low of $112,000.
Given that this ATH was a level not previously seen, it was natural for some profit-taking to occur, whether by institutions, investors, miners, or OG holders who decided to exit at this price range. A notable sell-off took place in the last few days of the month. Galaxy Digital disposed of 80,000 BTC for a client, valued at around $9 billion.
While it was a strong month for BTC Exchange-traded funds (ETFs), with only 4 days marking outflows, anything that goes up must come down, right? On July 31st and August 1st, over $920 million left ETFs, according to data from SoSoValue. The following graph, shared by CryptoQuant, is a good visualization of the sharp decline.
“ETF inflows were intermittent and not stable during periods when funds were withdrawn from ETFs. There was no alternative demand to compensate for this shortfall,” was noted by the blockchain page ArabxChain.
The macroeconomic scene also did not help much, with the most recent Federal Reserve meeting from last week, despite the US economy posting a 3% increase. President TRUMP used this opportunity to urge Fed Chair Jerome Powell to cut rates, but they remained unchanged.
Future Outlook
The crypto asset with the largest market capitalization experienced a few wobbly days and appears to be still recovering from them, with overall market santiment split between bearish and bullish.
The most recent liquidation heatmap from Coinglass indicates strong investor confidence that bitcoin will regain its previous levels, with a significant cluster of positions centered around the $120,000 mark.
Michaël van de Poppe noted on X that “Bitcoin is doing great,” but also emphasized the possibility that BTC is not entirely out of the woods yet.
“Rejection here? Yes, that WOULD mean we’re retesting the area around $110-112K.”
The author and advocate of BTC, Robert Kiyosaki, is still leaning toward a more bearish stance, citing historically low August levels. Although he will not shy away from buying the dip, should it happen.
