Bitcoin and altcoins crash, triggers $1 billion in crypto liquidations aftermath

The cryptocurrency market faced a brutal sell-off on July 31, with Bitcoin (BTC) plummeting to $114,322 and altcoins suffering even steeper losses.

The crypto liquidations aftermath saw over $1 billion in leveraged positions wiped out within 24 hours, as traders betting on a recovery were caught off-guard by renewed macroeconomic fears.

The downturn coincided with new U.S. tariff announcements, which also rattled traditional markets, including the Dow Jones and major Asian indices.

U.S. tariff shocks send crypto into a tailspin

The crypto liquidations aftermath began when the U.S. unveiled sweeping tariff increases, up to 35% on Canada and new duties on dozens of other countries, just hours before a deadline set by former President Donald Trump. The move, though anticipated, triggered a flight from risk assets. Bitcoin, which had briefly stabilized after the Federal Reserve held interest rates steady, tumbled 2.5%, while Ethereum (ETH) dropped 4.4% to $3,686.

“Tariff escalations create immediate uncertainty, and crypto markets are increasingly reactive to macro shocks,” — Marcus Sotiriou, analyst at GlobalBlock.

Altcoins mirrored the panic, with XRP briefly sinking to $2.93 before a partial recovery. The total crypto market cap fell 6.9% to $3.84 trillion, amplifying the crypto liquidations aftermath.

Leveraged traders absorb $1 billion blow

Data from Coinglass reveals the sheer scale of the crypto liquidations aftermath: between July 30 and August 1, $925.6 million in long positions were liquidated versus $159.3 million in shorts. BTC and ETH traders were hit hardest, with $142.19 million and $166.25 million in long positions erased, respectively.

“Leverage magnifies both gains and pain. This week’s moves show how quickly sentiment can flip,” — Rachel Lin, CEO of SynFutures.

The crypto liquidations aftermath underscores the risks of high leverage during volatile periods. Longs accounted for 85% of losses, reflecting misplaced optimism after Bitcoin’s earlier rebound.

Traditional markets echo the turmoil

The crypto liquidations aftermath wasn’t isolated. The Dow Jones closed 330 points lower, while Asian markets opened weak: Taiwan’s TAIEX dropped 162 points, and Hong Kong’s Hang Seng fell 45. The parallel declines highlight crypto’s growing correlation with macro trends.

“Digital assets are no longer a niche. They’re part of the global risk portfolio,” — David Mercer, LMAX Group CEO.

H2: What’s next for crypto markets?

Analysts warn the crypto liquidations aftermath could prolong sideways trading until macro clarity emerges. Key watchpoints include:

• Fed policy signals: Further rate delays may ease pressure.

• Tariff fallout: Escalations could extend risk-off sentiment.

• Altcoin resilience: ETH and XRP’s recovery pace will test market confidence.

“Volatility is the price of admission in crypto. Traders must size positions accordingly,” — Antoni Trenchev, Nexo co-founder.

Key takeaways from the crypto liquidations aftermath

• Over $1 billion in leveraged positions liquidated in 24 hours.

• BTC and ETH longs dominated losses ($142M and $166M, respectively).

• Macro-driven sell-off links crypto to traditional market shocks.