Bitcoin traders lose $100 million due to a $3,000 BTC price drop in 12 hours

On the final day of July, Bitcoin experienced a sharp decline, losing almost $3,000 over 12 hours of volatile fluctuations, which brought the cryptocurrency down to a two-week low. This drop, a reversal from the price movement on Thursday, significantly altered Bitcoin's growth trajectory, which just 24 hours earlier seemed to be confidently heading towards a double-digit monthly gain.

As market data from the last 24 hours shows, the cryptocurrency initially traded just below the $65,000 mark, and it appeared ready to maintain the momentum driven by the Federal Reserve's decision to leave interest rates unchanged. In fact, about three hours before midnight, Bitcoin surpassed this threshold on its way to a daily high of $65,340. However, that was the last time it traded at such levels, as a sharp wave of selling wiped out almost all the gains accumulated over the previous 24 hours.

Bitstamp data shows that after a gradual decline to just below $63,600, a sharp sell-off lasting less than an hour drove Bitcoin's price down to $62,369—its lowest level since July 17. Although a recovery rally saved it from falling below the $62,000 mark, this rebound failed to compensate for most of the previous losses, resulting in a daily loss of approximately 3%.

In turn, July's losses led Bitcoin's weekly loss to just over 2%, while its monthly gain shrank from nearly 10% on Thursday to 4.5% at the time of writing (13:09 EST). Meanwhile, Friday's Bitcoin price drop caused its market capitalization to shrink from $1.3 trillion to $1.26 trillion.

In the derivatives market, price movements were particularly brutal for traders with over-leveraged long positions. Market data shows that $100 million in long positions were liquidated, four times the $23 million liquidated roughly 24 hours earlier. The value of short positions liquidated during the same period was nearly $21 million. Overall, nearly $360 million in leveraged positions were liquidated across the crypto economy, with long positions accounting for nearly $235 million, or 65% of the total.

While the Federal Reserve's decision to keep rates steady contributed to Bitcoin's rise earlier in the week, the lack of progress in the U.S. Senate on the CLARITY Act bill soured market sentiment. The drawn-out legislative process in Washington prompted Senator Cynthia Lummis (R-WY) to once again call on her colleagues to pass the bill before the August recess.

However, with Senate Majority Leader John Thune yet to allocate time for the bill's discussion and the bill lacking the 60 votes needed for passage, prediction markets have sharply reduced the likelihood of its adoption in 2026 to around 30%—down from over 80% in February. The delay in passing this legislation deprives the cryptocurrency market of a regulatory framework that analysts believe is a key factor for ensuring long-term growth.