Why Did Crypto Drop? Here’s Why Sundays See Liquidation Hunting

[Ben Graham]

Why did crypto drop? On Sunday, August 24, 2025, Bitcoin plummeted from $114,700 to $110,600 in a matter of minutes, triggering $500M in liquidations and wiping out leverage long positions. Ethereum and Solana also felt heavy selling pressure.

The sell-off reflected macro fears, profit-taking, and ETF slowdown, while thin weekend liquidity magnified volatility. Sundays often become prime targets for whale-driven liquidation hunting, exploiting stop-loss clusters and overleveraged traders.

(Source – Tradingview.com)

Why Did Crypto Drop: Macros, Profit-Taking, and ETF Slowdowns

The August 24 crash was a perfect storm of macro uncertainty, technical weakness, and fading ETF momentum. Hotter-than-expected U.S. inflation and PPI data spooked markets, sparking risk-off sentiment after earlier Fed optimism.

Investors had priced in rate cuts sooner, but Powell’s Jackson Hole remarks gave way to fresh doubts, leading to global sell-offs. Still, Bitcoin is seen as a risk asset and is on the front lines of the first waves of bearish attacks.

Bitcoin didn’t just “take profits” today—it got caught in a perfect storm. Here’s the clean breakdown of why the 1‑hour candle on Aug 24 knifed from ~$117K to sub‑$112K

1) Macro jitters from Jackson Hole
Traders were de‑risking ahead of Powell’s Jackson Hole remarks, a… pic.twitter.com/fdQParOq82

— Crypto Dad (@CryptoDad_DDC) August 24, 2025

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At the same time, Bitcoin’s push above $124K earlier in August triggered waves of profit-taking. Long-term holders secured gains, while intraday breakdowns below key support like $113K set off a cascade of stop-loss triggers. Futures open interest was near record highs, fueling a chain reaction of liquidations. Fresh off its $5K ATH, Ethereum also slipped over 2%.

Wtf is happening. pic.twitter.com/aEdYpvNQO9

— Byzantine General (@ByzGeneral) August 24, 2025

Adding fuel to the fire, ETF inflows stagnated, with BTC ▼-2.96% and ETH ▼-3.71% spot products even showing outflow.

That capped fresh demand at a time when sentiment was shifting. Historically, August is among crypto’s weakest months, with declines in eight of the last 12 years, and regulatory headwinds only piled on. These factors formed the pressure cooker that cracked open Sunday’s sell-off.

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Expert Explains: Why Are Sundays Prime For Liquidity Hunting?

Sundays have become notorious in crypto circles for brutal liquidation hunts. Unlike weekdays, when institutional activity keeps the market liquid, the order books are thin on weekends. With fewer players, it’s easier for large holders, “whales,” to move prices strategically.

With little effort, whales manage to send the price to significant clusters of leveraged liquidation stop areas, forcing automatic sells or buys. Often, this creates an explosive and cascading price effect, leaving regular users in awe.

It might be a forced liquidation event on a low-volume Sunday. Recent longs have been flushed completely.

But should this sell-off manifest through Monday morning, this is my plan for one level lower (if it comes): https://t.co/WHWidANL1G pic.twitter.com/2ohp9jOIlj

— Patric H. | CryptelligenceX (@CryptelligenceX) August 24, 2025

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This strategy thrives when retail traders chase weekend price action. A slow, higher grind lures them into overleveraged longs, and then a sharp, engineered dump wipes them out.

For example, early August lows near $111,900 acted as magnets, where liquidity clustered. With 25x leverage common on platforms like Binance, even small swings trigger cascading liquidations. Some past events have seen over $2Bn erased in just 24 hours.

Sundays are especially attractive because they “reset” leverage before Monday’s institutional flow. Whales scoop cheap coins after weak hands are flushed out, setting up higher price runs in a bull cycle. While painful, this weekend wicks and rebounds cycle has played out repeatedly.

For seasoned traders, it’s less about panic and more about opportunity, recognizing that Sunday dumps are often Monday discounts.

What Comes Next for Bitcoin and Altcoins?

Bitcoin

Price

Market Cap

BTC

$2.23T

24h7d30d1yAll time

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Despite the weekend chaos, long-term crypto fundamentals remain bullish. Bitcoin closed the weekly candle at around $113K, leaving a long lower wick, which was historically a reversal signal.

This suggests that while short-term pain stung, buyers quickly stepped back in. Spot and derivatives volumes dipped 6-9%, but the flush cleared excess leverage that had built up in prior weeks.

Ethereum and Solana’s relative resilience also underscored a shift. Altcoins only fell slightly compared to majors, hinting that rotation may support overall market strength. Bitcoin’s dominance, slipping between 57.9%, confirmed this trend.

A recovery narrative remains intact with ETF flows expected to stabilize and institutional players awaiting macro clarity.

(Source – TradingView.com)

External influences ranging from Trump’s tariff adjustment to speculation about FBI sales of seized Bitcoin added noise but didn’t dent long-term adoption. Institutional demand remains robust beneath the surface, primarily through ETFs and custodial products.

Historical cycles show that liquidation-driven weekends often precede strong runs higher. In the short term ,traders should expect chop, fueled by macro data releases and regulations. But the bigger 2025 bull case, powered by ETF demand and adoption, still looks firmly on track.

DISCOVER: 9+ Best High-Risk, High-Reward Crypto to Buy in 2025

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Key Takeaways

Why did crypto drop?

From speculation to profit taking.

Is crypto still on track to new highs?

The post Why Did Crypto Drop? Here’s Why Sundays See Liquidation Hunting appeared first on 99Bitcoins.