The crypto market crashed, with Bitcoin dipping to $114,881, 2.6% lower in the previous 24 hours. The drop wiped an estimated $100 billion in value off the total crypto market, with trading desks and investor groups in panic mode.
Liquidations have accelerated with over $100 million worth of longs being liquidated, which reflects how bearish sentiment has flipped. A combination of economic headwinds, institutional flight, and technical chart weaknesses is blamed by analysts to be behind this dazzling correction.
Textbook. ✅ #Bitcoin dumps to $115,300 as the key level of $116,900 was unable to act as support.
Exactly as anticipated. #BTC
If price finds support here, I‘d want to see it reclaim $116,900. Next lower support comes in at $113,300. #Crypto#Altcoins took a hit as well.… https://t.co/3j9norQXu5 pic.twitter.com/6WgJNl4QmD
— Sandman (@cryptoxsandman) August 18, 2025
Inflation Powers Dollar
The underlying cause of the fall could be the just-released U.S. inflation report, which printed higher than expected. The report put an end to speculations of a Federal Reserve interest rate cut shortly and instead supported the U.S. dollar’s position.
For Bitcoin, it is a tightrope. However much the virtual currency is discussed informally as an inflation hedge over the long term, in the near term, it doesn’t wear well if the dollar is strong enough. This tightening cycle did not so much force investors out of risk assets as cause them to lose interest in them, and it’s dragging markets lower across the world.
Rising U.S. inflation strengthens the dollar, dashing hopes of an imminent Fed rate cut ( Image Source: Shutterstock )
Institutions Hit the Brakes
Even the institutional environment seems to be broken. Trust Bitcoin ETFs, touted as some sort of step towards mass adoption, now experience huge outflows. Redemptions are a sign of diminishing demand from large-ticket investors that were the pillar of strength for the asset.
This is a telling pullback: even financial giants won’t accept near-term volatility. The exit of these investors fans the fire, making the sell-off both faster and scaring confidence in hordes.
Chart Patterns Wave Red Flags
Bitcoin has technically broken out of a rising wedge pattern — a formation that was classically regarded as a bearish sign. Market technicians now concentrate on $112,000 as the next important support level.
If Bitcoin can’t stay above this level, some investors warn, it will open the floodgates for an even larger plunge to $105,000. Momentum, so crucial to Bitcoin rallies in the past years, is now totally in the bears’ favor.
Bitcoin slips from a rising wedge pattern, with $112K now the key support level to watch ( Image Source: altfins.com
Corporate Buyers See Opportunity
Volatility or not, however, not all are rushing for the hills. In fact, many corporate purchasers are viewing the slump as a chance to buy in.
In Japan, real estate company Tokai Tokio Liberty Work announced it would invest $3.4 million in Bitcoin as a long-term hedge against inflation. In France, investment platform Capital B secured $2.6 million in new funding to invest in Bitcoin, with the backing of well-known industry veteran Adam Back, CEO at blockchain technology company Blockstream.
These moves underscore the dramatic dichotomy: as traders and institutions are shaken, longer-term corporates are seeing the dip as an opportunity to buy.
Stress and Silver Linings
Today’s sell-off is meant to point out one of the more prevalent trends in Bitcoin’s history — abrupt price capitulations that shake out leveraged traders and, most often, pave the way for new cycles of accumulation and recovery.
There is market tension, but also opportunity. For the short-term traders, it is a question of whether Bitcoin can hold the $112,000 support or not. For the long-playing bulls, this correction can be a window of opportunity into one of the strongest assets in the digital economy.
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Ripple Effect Across the Market
Bitcoin’s downturn is dragging the rest of the crypto world down with it. Top altcoins are also trading in the red, once again placing Bitcoin in the spotlight as the crypto world’s sentiment indicator. The shed value of $100 billion in overall market capitalization indicates how Bitcoin still holds sway to impact the broader digital asset world.
But corporates’ persistence in buying works as a counterbalance. This implies that while traders are cautious, long-term belief in the future role of Bitcoin as a hedge and store of value is still undisturbed. What Comes Next
The immediate next few days appear to be the turning point. If Bitcoin can hold or consolidate at or near $112,000, then the market can catch its breath and perhaps set itself up for a reversal. If this does not materialize, then the next leg down to $105,000 might be sent to the investors’ patience and endurance test.
Uncertainty in the short term. The crash is a reminder of how sentiment can turn overnight from bullish to cautious in the cryptocurrency space. There are numerous examples in the past regarding how every Bitcoin dip has, at some point, set the stage for the next bull run.
