On August 26, 2025, Bitcoin (BTC) fell below $109,000, its lowest point in seven weeks. This wiped out gains that had followed Federal Reserve Chair Jerome Powell’s Jackson Hole address, which had hinted at an interest rate reduction.
This sudden 2.8% drop in one day resulted in more than $900 million in liquidations in the crypto market, affecting 200,000 dealers. CoinGlass reports that most of them were long bets, with Bitcoin alone accounting for $277.21 million in liquidations. The market became more volatile as a big holder sold 24,000 BTC, which increased selling pressure.
The total value of the crypto market dropped from $4 trillion to $3.84 trillion, a loss of nearly $200 billion. This downturn wiped out last week’s gains, as there was little liquidity over the weekend, and people were shifting away from risk assets.
In crypto bull markets, September has historically been a bad month, as observed in 2017 and 2021. This makes the view more cautious as traders are now wondering if this is just a brief respite or the beginning of a more significant decline.
Ethereum (ETH) experienced the largest liquidations of any cryptocurrency, totaling $320 million. However, it was more stable than Bitcoin, which was trading at $4,340. ETH remains above its low from last week, despite an 8% drop from its recent high of almost $4,900.
This is because institutional investors remain interested in it, and Ethereum has increased by 80% in the last 60 days, which is significantly more than Bitcoin’s 3% rise. This strength shows how appealing ETH is even when the market is unstable.
Solana, Dogecoin, and XRP also experienced significant losses, with Solana dropping 8.5% to $186 and Dogecoin plunging more than 10% to $0.208. The fact that traders had to sell off positions that were too leveraged and exceptionally long shows that they were not ready for a rebound. The market’s enormous leverage and sales led by whales caused the rapid drop, and the consecutive liquidations accelerated the plunge.
The $900 million liquidation event indicates that the market is volatile and that people are using excessive leverage. Long positions lost 86% of the money. Rachael Lucas and other analysts suggest that capital is shifting away from risky investments, although short pools above current BTC and ETH values could trigger a bounce if buyers return.
Past patterns indicate a possible reset, as seen following a $922 million liquidation on August 1. However, traders remain concerned as Bitcoin struggles to stay above $110,000, with options worth $14.6 billion set to expire.
