Bitcoin Falls to $112K, Sparking $200B Crypto Selloff
The crypto market saw a rapid crypto selloff in August 2025 after US Federal Reserve remarks tightened risk sentiment. Bitcoin plunged to a six-week low near $112,000, erasing roughly $200 billion in market value. The Bitcoin drop triggered over $500 million in leveraged liquidations, worsening liquidity stress in derivatives and amplifying the broader crypto selloff. Altcoins suffered heavier losses as Bitcoin dominance fell to about 56%, while decentralized finance tokens and small-cap projects faced the steepest declines. Traders reacted to perceived hawkish Fed signals by deleveraging and triggering stop-loss cascades. To navigate future volatility, maintain lower leverage, set strict stop-loss orders, and closely monitor central bank communications. This selloff underscores digital assets’ sensitivity to macro policy shifts and the need for robust risk management.
Bearish
This news is bearish. Fed Chair’s hawkish comments tightened risk sentiment, causing Bitcoin to fall to $112K and over $500 million in leveraged liquidations. The ensuing crypto selloff wiped out $200 billion in value and weakened liquidity across altcoins. Similar Fed-driven corrections—such as during the 2022 rate-hike cycle—led to sustained volatility and market downturns. In the short term, traders will likely reduce exposure and hold more cash. Over the long run, ongoing central bank hawkishness could cap upside potential until clearer dovish cues emerge.