August 1: BTC Breaks Below $64K to Two-Week Low — $3K Flash Crash in 12 Hours, $360M Liquidation Cascade (65% Longs), BOJ Holds but Warns Inflation Could Exceed 2% for the First Time, $9.6B Expiry Voids $70K Calls, ETFs Absorb $212.7M, CLARITY Act Odds Drop to 30%, Revolut Drops USDT, Peru Travel Rule Live
BTC shed nearly $3,000 in 12 hours overnight, flash-crashing from $65,340 to $62,369 — a two-week low — with a ~3% daily loss trimming July's monthly gain from ~10% to 4.5%. Total liquidations hit ~$360M across 90,000+ traders, 65% longs (~$235M); BTC longs alone lost $100M (4x the prior day) and Fear & Greed fell to 25. The BOJ held rates at 1.00% (8-1) but issued a first-ever warning that underlying inflation could exceed 2%, with Ueda signaling a possible Sep/Oct hike; the yen weakened to ~160.88 despite suspected intervention. The $9.6B July 31 options expiry settled BTC at $63,824 near max pain, voiding ~$3.3B of $70K/$72K calls; the $60K put became the hottest position. ETFs absorbed a net +$212.7M, ending four days of outflows, with July at ~+$438M. The CLARITY Act stalled (2026 odds ~30%), Revolut delists USDT by Aug 31, Peru's Travel Rule is live today, and Minnesota's Bitcoin ATM ban took effect.
Crypto Market News Brief — August 1, 2026
| Event | Key Point |
|---|---|
| 📉 BTC Breaks Below $64K, Two-Week Low | ~$3,000 drop in 12 hours — flash crash from $65,340 to $62,369 — daily close ~-3% |
| 💥 $360M Liquidation Cascade | 90,000+ traders liquidated — longs ~$235M (65%) — BTC longs $100M (4× prior day) |
| 🇯🇵 BOJ Holds But Turns Hawkish | 8-1 vote keeps rate at 1.00% — first-ever warning inflation could exceed 2% — Ueda hints at Sep/Oct hike |
| 📊 $9.6B Options Expiry Resolved | 149K BTC contracts expired — settled at $63,824 near max pain $64K — $70K calls voided |
| 🟢 ETFs Snap 4-Day Outflow Streak | July 31 net inflow +$212.7M (+3,397 BTC) — week on track 4th straight positive — July ~$438M |
| 📉 Fear & Greed Falls to 25 | Down from 28 — approaching "Extreme Fear" boundary |
| 🇺🇸 CLARITY Act Stalled | No progress before Senate recess — 2026 passage odds ~30% — Coinbase withdrew support |
| 🏦 Revolut Drops USDT | Full delisting for EU users by Aug 31 — world's largest stablecoin exits MiCA market |
| 🇵🇪 Peru Travel Rule Live Today | VASPs must transmit sender/recipient data on every crypto transfer — no de minimis |
| 🇰🇷 Kimchi Premium Turns Positive | Upbit +0.57% vs Binance — sharp reversal from -2.05% reverse premium |
| 📉 August Curse Begins | BTC down every August for 4 years (avg ~-10%) — July gains trimmed from ~10% to 4.5% |
一、📉 Core Event: BTC Breaks Below $64K — $360M Liquidation Cascade
From the evening of July 31 into the early hours of August 1, Bitcoin suffered its most violent drawdown of the month: BTC shed nearly $3,000 in 12 hours, flash-crashing from an intraday high of $65,340 to $62,369 — its lowest level since July 17. A relief rally kept price above $62,000, but the daily close still landed roughly 3% lower.
| Price Metric | Data | Interpretation |
|---|---|---|
| 12-Hour Drop | ~$3,000 | From $65,340 high — most of the decline in under an hour |
| Low | $62,369 | Lowest since July 17 — hugging the $62K psychological level |
| Daily Close | ~-3% | Weekly gain compressed to ~2% |
| Monthly Gain | Trimmed from ~10% to 4.5% | July's rally heavily reduced |
Liquidation Structure: Long-Dominated Cascade
This decline was the exact mirror of July 30's "short squeeze" — longs were the ones being liquidated:
| Liquidation Metric | Data | Interpretation |
|---|---|---|
| Total Liquidations | ~$360M | 90,000+ traders wiped out |
| Long Liquidations | ~$235M (65%) | Long leverage systematically cleared |
| BTC Longs | $100M | 4× more than the $23M liquidated a day earlier |
| Short Liquidations | Only ~$21M | Shorts took profit — clear directional shift |
Sentiment deteriorated in tandem: the Fear & Greed Index fell from 28 to 25, nearing "Extreme Fear." The flash crash had no single trigger — it was a confluence of "crowded long positioning after options expiry + a more hawkish-than-expected BOJ + the stalled CLARITY Act," and leveraged longs were cascaded out for lack of incremental capital.1
二、🇯🇵 BOJ Holds But Turns Hawkish — First Inflation Overshoot Warning
The Bank of Japan's decision was the key variable for the Asian session. Result: rate held at 1.00% (8-1 vote), but the language was unexpectedly hawkish.
| BOJ Decision Points | Detail |
|---|---|
| Rate Decision | Held at 1.00% (8-1 vote) — second straight hold after June's 25bp hike |
| Dissent | Board member Hajime Takata called for an immediate hike to 1.25% — also dissented in April |
| Rare Warning | First-ever warning that "underlying inflation could exceed the 2% target" — strongest overshoot signal |
| Ueda's Stance | Signaled a possible September or October hike — "upside risks too big to ignore" |
| Inflation Forecast | FY2026 core inflation cut to 2.5% (from 2.8%) — due to government utility subsidies |
| GDP Forecast | FY2026 upgraded to 0.6% (from 0.5%) — improving economic assessment |
Key read: beneath the "hold" surface, the BOJ delivered a clear hawkish forward guidance — a first-ever written warning of possible inflation overshoot, plus Ueda signaling a Sep/Oct hike, supporting the yen. Yet the yen actually weakened ~0.7-0.9% to ~160.88 after the decision — following a suspected official intervention in New York markets the prior day (the first since the record $73B April-May intervention), which had pushed the yen up over 3%. Concerns that intervention is losing its punch amplified volatility across global risk assets.2
三、📊 $9.6B Options Expiry Resolved — Bullish Calls Voided
The July 31 Deribit monthly settlement became a market watershed: 149,000 BTC options ($9.6B notional) plus 435,000 ETH options ($830M) expired, totaling roughly $10.43B.
| Expiry Data | Value | Interpretation |
|---|---|---|
| BTC Options Expired | 149K (~$9.6B) | ~30% of outstanding contracts |
| Put/Call Ratio | 0.28 | Heavily call-weighted |
| Max Pain | $64,000 | BTC settled at ~$63,824 — right at max pain |
| ETH Options | 435K ($830M) | Max pain $1,850 — ETH traded ~$1,891 |
| $70K/$72K Calls | ~$3.3B OI voided | Evidence of over-bullish pre-expiry positioning |
The watershed signal: before expiry, the market was heavily positioned for a run to $70,000-$72,000 (with ~$3.3B open interest there), yet BTC failed to break $65,038. After settlement, Deribit's positioning turned defensive fast: the $60,000 put became the most popular position ($1.17B OI), displacing the once-hot $70K call. The market has shifted from "betting on upside" to "hedging downside."3
四、🟢 ETFs Snap Outflow Streak — But Fail to Underpin Price
In stark contrast to the price drop, US spot Bitcoin ETFs recorded a net inflow of $212.7M (+3,397 BTC) on July 31, ending a four-day outflow streak (cumulative -$527M from July 23-28).
| ETF Flow | Data |
|---|---|
| July 31 Net Inflow | +$212.7M (+3,397 BTC) |
| July 30 Net Inflow | +$233.1M (BlackRock IBIT contributed $183.4M, 78.7%) |
| Weekly | On track for a 4th consecutive positive week — longest run since early May |
| July Cumulative | ~+$437.8M — ending two straight months of outflows (May -$2.4B, June -$4.5B) |
| 2026 YTD | Still ~-$4.76B — not yet positive for the year |
A notable contradiction: ETF inflows and falling prices happening simultaneously mean institutions are buying the dip at $63K-$64K while leveraged longs get cleared out. This decline looks more like "high-leverage cleaning" than "institutional exit." That said, one or two strong sessions don't confirm a trend reversal in institutional flows — ETH ETFs still saw a net outflow of 1,757 ETH (~$3.27M) on July 31, with 7-day outflows widening to 38,195 ETH.4
五、📜 Regulatory & Industry Developments
US: CLARITY Act Stalled in Senate
The Digital Asset Market Clarity Act made no progress before the Senate's August 8 recess; prediction markets put 2026 passage odds at roughly 30% (down from 80%+ in February). JPMorgan warned that declining passage odds are a headwind for the entire crypto market. The bill cleared the Senate Banking Committee but faces a 60-vote threshold and disputes over stablecoin yield provisions — Coinbase also withdrew its support over stablecoin reward terms. If passed, the grandfather clause would establish commodity status for tokens already tied to spot ETFs (XRP, Solana, Litecoin, Hedera, Dogecoin, Chainlink).
Europe: Revolut Drops USDT + New EU Sanctions
Revolut will fully delist USDT for European users by August 31 — new purchases stopped July 6, deposits July 30. Tether declined to seek MiCA authorization in the EU (reserves ~60% in European bank deposits would be required), making Revolut the last major European platform to exit the world's largest stablecoin. USDT's market cap remains ~$184B vs ~$73B for MiCA-compliant USDC.
The EU's 21st Russia sanctions package (adopted July 23) includes transaction bans on 14 crypto service platforms — effective August 13 for A7 Nigeria, A7 Africa, PilotFinance, and August 23 for HTX (Huobi Global), EXMO, and others. From August 25, Belarusian nationals/residents are barred from owning, controlling, or leading MiCA-regulated crypto firms.
Latin America: Peru Travel Rule Live Today
Peru's crypto Travel Rule took effect August 1 (SBS Resolution 02648-2024): all VASPs domiciled in Peru must collect and transmit originator and beneficiary information on every crypto transfer — no de minimis exemption. Transfers under $1,000 need only lighter data; $1,000+ requires address and date/place of birth; self-hosted wallet transfers are included. Peru processes ~$28B in crypto annually, with ~4.5 million Peruvians holding crypto.
US: Minnesota Laws Effective Today
Minnesota laws effective August 1: virtual currency kiosks (Bitcoin ATMs) are banned — operators must remove them by December 31, 2026 and return customer funds; banks and credit unions may offer virtual currency custody on a non-fiduciary basis.
六、⚠️ Risk Warnings
- Leverage cleaning incomplete: 65% of the $360M in liquidations were longs — Coinglass models show a break below $59,951 could trigger ~$951M in long liquidations
- Hawkish BOJ overshoots expectations: first inflation-overshoot warning — an early Sep/Oct hike would hit global risk assets via yen carry-trade unwinds
- August seasonality curse: BTC fell every August for 4 years (avg ~-10%); midterm-election years average -13.6%
- ETF inflow vs price divergence: institutions buy dips while leverage clears — short-term direction hinges on the $62K-$63.3K battle
- Regulatory uncertainty: CLARITY Act passage odds at 30% — XRP and the broader regulatory narrative stay pressured
⚠️ Risk Disclaimer: This is news roundup and commentary, not investment advice. BTC broke below $64K on the first day of August amid a $360M liquidation cascade — a confluence of a hawkish BOJ hold, voided $70K calls after the $9.6B expiry, and the stalled CLARITY Act. Yet ETFs absorbed $212.7M, showing institutional dip-buying. Cryptocurrency markets are extremely volatile — manage your risk.
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Footnotes:
Footnotes
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Source: CoinGlass liquidation data; Eastmoney trader liquidation stats, July 31-August 1, 2026 ↩
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Source: Bank of Japan policy statement and Quarterly Outlook Report; Reuters/Investing.com instant views, July 31, 2026 ↩
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Source: Greeks.live Deribit settlement data; CoinDesk options market coverage, July 31, 2026 ↩
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Source: US spot BTC/ETH ETF daily flows (blockchain.news/Farside aggregation), July 30-31, 2026 ↩