Is crypto in trouble? That’s the question everyone’s asking after Bitcoin plunged to $114,000 just hours after the SEC’s biggest announcement in years. But here’s the real answer: While short-term panic triggered a sharp sell-off, a deeper shift is unfolding.
The U.S. has officially embraced crypto regulation through the SEC’s new “Project Crypto” initiative, a move that could reshape the entire industry. So yes, the charts are red, but behind the fear lies a major opportunity.
What Caused the Sudden Crypto Market Crash?
The immediate cause was pressure from the broader economy. Core inflation rose to 2.8%, which was higher than expected. At the same time, former President Trump announced new tariffs on over 50 countries. This raised concerns that the U.S. could face both rising prices and slower economic growth at the same time.
Additionally, the revised jobs data showed U.S. job growth was much weaker than first reported, down by over 250,000 jobs for May and June.
This put the Federal Reserve in a tough spot, stuck between rising inflation and a weakening economy. As a result, any plans to cut interest rates may be delayed, which has shaken investor confidence.
Is the Crypto Bull Run Over?
No, despite the drop in prices, key on-chain signals show that we’re still in a strong position.
- ME Futures Premium is holding above 8% for both Bitcoin and Ethereum, showing hedge funds are still active. This carry trade is a bullish sign and means there’s no sign of panic from big players.
- Funding rates and liquidations remain stable. There’s no major leverage wipeout or warning of market overheating.
- The Global M2 Money Supply, which tracks global liquidity, is rising. Bitcoin has a strong history of following this trend, suggesting the price may climb again soon.
- The Pi Cycle Top Indicator, which accurately signaled previous market tops, shows we’re not close to the peak. The key moving averages haven’t crossed yet, meaning the bull market likely still has room to grow.
In short, the data says this isn’t the end; it’s a typical bull market correction.
Institutions are Buying the Dip
Strategy (formerly MicroStrategy) now holds 628,800 BTC after adding 20% more last quarter. CEO Michael Saylor said they plan to raise another $4.2 billion to buy more.
- Also Read :
- August 2025 Crypto Calendar: Key Unlocks, Launches, Delistings, Airdrops & Global Events to Watch
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Coinbase added 259 BTC, bringing its total to 11,776.
BlackRock’s IBIT ETF brought in $87 billion from over 1 million new investors—most new to BlackRock.
A Deloitte survey shows 99% of CFOs at billion-dollar companies expect to use crypto long-term, and nearly 40% plan to use it for payments or investments within two years.
Conclusion
July was a strong month for both Bitcoin and Ethereum, but that momentum is now fading. Trading volumes are low, volatility is rising, and doubts are growing about the strength of recent gains. The real test comes on the FED’s August 7 Meeting, and August 12 CPI data could decide whether this correction ends or deepens.
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FAQs
The crypto market dropped due to economic uncertainty – higher-than-expected inflation (2.8%), weak jobs data, and potential delayed Fed rate cuts caused investor panic despite long-term bullish indicators.
The SEC’s “Project Crypto” is a new regulatory initiative to establish clear guidelines for digital assets, aiming to bring compliance and stability to the cryptocurrency market while protecting investors.
No. On-chain data (ME Futures Premium, Pi Cycle Top) shows no overheating. Institutions are buying dips, and global liquidity trends remain bullish.
Yes. MicroStrategy added 20% more BTC, Coinbase accumulated 259 BTC, and BlackRock’s IBIT ETF drew $87B, signaling strong institutional confidence.
