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Bitcoin (BTC) hit an all-time high (ATH) of $123,091 on July 13, 2025, but has shed almost $9,000 ever since as a result of market volatility. CryptoQuant, the data analytics platform, offered three unique reasons for the Bitcoin crash in late July.
Liquidity inventory collapse signals market instability
According to the update, Bitcoin’s price decline at the end of July was a result of a mismatch between low supply and weak demand. Notably, buyers like the exchange-traded funds (ETFs) and large investors pulled back, and there was no major demand from other market participants to make up.
This triggered a liquidity inventory ratio collapse as the amount of Bitcoin available for sale in July dropped to the lowest in history.
For clarity, in a normal market situation, a short BTC supply usually leads to a boost in price. However, due to weak demand to mop up the low supply, prices took a nosedive, resulting in the almost $9,000 price plunge of the leading cryptocurrency.
Furthermore, in July, ETF inflows were not stable as they alternated between high flows and sudden drops. Therefore, support from institutional buyers was nonexistent to support price stability. This contributed to the sharp decline in price.
Large accumulators like Metaplanet have, however, resumed purchase of the asset. On Aug. 4, the firm acquired 463 BTC for its holdings.
Robert Kiyosaki predicts further Bitcoin plunge
These combinations of factors sparked a massive price drop once the market experienced any small wave of selling. As of press time, Bitcoin trading volume is up by 13.63% to $55.96 billion. However, BTC is changing hands at $114,314.30, representing a 0.22% decline in the last 24 hours.
This means that in the last seven days, the flagship crypto asset has declined by a significant 3.92%, according to CoinMarketCap data.
Meanwhile, Robert Kiyosaki, author of "Rich Dad Poor Dad," opines that Bitcoin could plunge further in August. According to him, Bitcoin's "curse" is likely to trigger a crash, and he hopes it pulls the asset as low as $90,000 so he could have an opportunity to double his investment.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team