Why Did Crypto Decline? Here’s the Reason Sundays Experience Liquidation Hunting

What caused the drop in crypto? On Sunday, August 24, 2025, BTC fell sharply from $114,700 down to $110,600 within minutes, resulting in $500M worth of liquidations and eliminating long leverage positions. ETH and Solana experienced significant selling pressure as well.

This downturn was attributed to macroeconomic worries, profit-taking, and a slowdown in ETF activity, while reduced liquidity over the weekend exacerbated price swings. Sundays often turn into prime occasions for whale-driven liquidation targeting, taking advantage of stop-loss clusters and overleveraged traders.

(Source – Tradingview.com)

Reasons Behind the Crypto Decline: Macroeconomic Factors, Profit-Taking, and ETF Delays

The crash on August 24 was fueled by a series of macro uncertainties, technical weaknesses, and a reduction in ETF momentum. Unexpectedly high U.S. inflation and PPI figures unnerved the markets, creating a risk-off atmosphere following prior optimism from the Fed.

Investors had anticipated earlier rate cuts, but Powell’s remarks from Jackson Hole sparked new skepticism, culminating in global sell-offs. Nevertheless, BTC remains perceived as a risk asset and faces the initial blows of pessimistic pressure.

BTC didn’t merely “take profits” today—it found itself in a perfect storm. Here’s a detailed breakdown of why the 1‑hour candle on Aug 24 fell from ~$117K to below $112K

1) Macro anxiety from Jackson Hole
Traders were minimizing risk ahead of Powell’s comments from Jackson Hole, a… pic.twitter.com/fdQParOq82

— Crypto Dad (@CryptoDad_DDC) August 24, 2025

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Additionally, Bitcoin’s surge above $124K earlier in August prompted rounds of profit-taking. Long-term investors took their profits, while intraday breakdowns beneath key support such as $113K led to a series of stop-loss activations. Futures open interest was nearing record levels, instigating a chain reaction of liquidations. Following its $5K all-time high, ETH also experienced a drop of more than 2%.

What in the world is happening. pic.twitter.com/aEdYpvNQO9

— Byzantine General (@ByzGeneral) August 24, 2025

Exacerbating the situation, ETF inflows stagnated, with Bitcoin ▼-2.96% and Ethereum ▼-3.71% spot products even recording outflows.

This capped new market demand during a time of shifting sentiment. Historically, August is one of the weakest months for crypto, with declines noted in eight out of the last twelve years, compounded by regulatory challenges. These factors created the pressure cooker that led to the price drop on Sunday.

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Expert Opinion: Why Are Sundays Ideal for Market fluidity Targeting?

Sundays have gained a reputation in crypto communities for aggressive liquidation hunts. Unlike weekdays, where institutional activities maintain market fluidity, the order books are sparse on weekends. With fewer participants, it becomes simpler for large stakeholders, known as “whales,” to shift prices intentionally.

Whales can effortlessly direct prices toward significant concentrations of leveraged stop areas, prompting automatic sells or buys. This frequently creates a dramatic and cascading price reaction, leaving ordinary traders astounded.

It may be a forced liquidation event on a low-volume Sunday. Recent long positions have been completely wiped out.

However, if this price drop continues into Monday morning, here’s my plan for the next level down (if it occurs): 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 pursue weekend crypto market movements. A gradual, upward grind entices them into overleveraged positions, followed by a sudden, orchestrated downturn that eliminates them.

For instance, early August lows around $111,900 acted as magnets, clustering market fluidity. With 25x leverage prevalent on platforms like Binance, even minor fluctuations can trigger cascading liquidations. Some past instances have resulted in over $2 billion being wiped out in a mere 24 hours.

Sundays present a unique opportunity as they “reset” leverage ahead of the forthcoming institutional influx on Monday. Whales take advantage of the low prices after the weak hands have been shaken out, preparing for higher price movements in a bull market. Though painful, this cycle of weekend drops and rebounds has occurred time and again.

For seasoned traders, it’s not about panic but about seizing opportunity, understanding that Sunday declines are frequently Monday bargains.

What Lies Ahead for BTC and Altcoins?

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Despite the tumult of the weekend, the long-term fundamentals for crypto continue to remain bullish. Bitcoin concluded the weekly candle at approximately $113K, displaying a long lower wick, which is historically seen as a reversal indicator.

This signals that while there was short-term discomfort, buyers swiftly re-entered the crypto market. Spot and derivatives volumes dipped by 6-9%, but the flush eliminated the excessive leverage that had accumulated in the weeks prior.

Furthermore, Ethereum and Solana’s relative strength highlighted a notable shift. Altcoins experienced only minor declines relative to the major tokens, suggesting that rotation could bolster overall trading market strength. Bitcoin’s dominance, which has settled around 57.9%, further affirmed this trend.

A recovery narrative remains intact with ETF flows anticipated to stabilize and institutional investors awaiting clearer macroeconomic developments.

(Source – TradingView.com)

External factors such as Trump’s tariff changes and rumors regarding FBI BTC sales created noise but did not hinder long-term adoption trends. Institutional interest remains strong beneath the surface, primarily via ETFs and custodial solutions.

Historical trends indicate that weekends marked by liquidations often precede significant upward movements. In the short term, traders should brace for fluctuations driven by macroeconomic data releases and regulatory updates. However, the overarching uptrend narrative for 2025, driven by ETF demand and broader adoption, continues to look promising.

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