The cryptocurrency market experienced a sharp downturn on September 4, with Bitcoin dropping over 5% at one point before partially recovering. As of the latest data, Bitcoin had lost more than 4% in the past 24 hours, trading around $56,563. Ethereum and other major digital assets followed suit with significant declines, sending shockwaves across the market.
According to Coinglass, the sell-off triggered over 75,000 liquidations globally, with total losses reaching $200 million. This wave of margin calls highlights growing volatility and investor vulnerability amid macroeconomic uncertainty and shifting capital flows.
Bitcoin Hits One-Month Low Amid Risk-Off Sentiment
Bitcoin dipped to its lowest level in a month as global investors pulled back from high-risk assets. Fears over slowing economic growth have fueled a broader market retreat, with crypto assets particularly sensitive to changes in sentiment.
Just weeks earlier, in early August, Bitcoin had plunged more than 14% in a single week—its worst weekly performance since the FTX collapse in 2022—after U.S. nonfarm payrolls data came in significantly below expectations. The price briefly dropped below $49,000 on August 5, sparking widespread margin liquidations.
Now, with the next U.S. nonfarm payrolls report due this Friday, traders are bracing for potential repetition. Historical patterns suggest that weak labor data could reignite fears of economic stagnation, prompting further risk aversion.
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Spot Bitcoin ETFs See Heaviest Outflows in Four Months
A notable shift has emerged in spot Bitcoin exchange-traded funds (ETFs), signaling waning short-term confidence among institutional and retail investors.
Data from Sosovalue shows that 12 U.S.-listed spot Bitcoin ETFs—including BlackRock’s IBIT and Fidelity’s FBTC—have recorded five consecutive days of net outflows, totaling over **$765 million**. This outflow streak follows an earlier eight-day period of net inflows amounting to $753 million, meaning recent withdrawals have already surpassed prior accumulation.
On September 3 alone, the group saw a record $287.8 million** in net outflows—the largest single-day withdrawal in four months. Fidelity’s FBTC led the retreat with **$162.3 million exiting the fund, followed by Grayscale’s GBTC ($50.4 million), Bitwise’s BITB ($25 million), and ARKB from ARK Invest ($33.6 million).
This reversal raises questions about investor sentiment ahead of key economic releases and the upcoming U.S. presidential election. With macro uncertainty looming, many market participants appear to be de-risking their portfolios.
Why Are Traders Hedging Against Further Declines?
ArbelosMarkets’ head of trading, Sean McNulty, noted a resurgence in demand for downside protection in the Bitcoin options market. “We’re seeing renewed interest in bearish options positioning—particularly around $55,000 and below,” he said. “This reflects hedging both around the upcoming jobs data and post-election uncertainty.”
The rise in put options activity suggests traders are preparing for additional downside risk. Open interest in lower-strike puts has increased notably, indicating that professional traders expect potential further depreciation if macro conditions worsen.
Bitcoin ATM Fraud Cases Skyrocket
While market volatility grabs headlines, another alarming trend is unfolding: a surge in fraud involving Bitcoin ATMs.
The U.S. Federal Trade Commission (FTC) reported this week that financial scams tied to Bitcoin ATMs are rising at an alarming rate. These machines—often found in convenience stores, gas stations, and bars—resemble traditional ATMs but allow users to buy or sell cryptocurrency using cash.
In 2023 alone, consumers reported losing $114 million** through Bitcoin ATM scams—an increase of nearly **900%** compared to the previous three years combined. Already in the first half of 2025, reported losses have reached **$66 million, suggesting the problem is accelerating.
Victims lose an average of $10,000 per incident, with older adults disproportionately affected. According to the Better Business Bureau (BBB), individuals aged 60 and above are more than three times as likely to fall victim to these scams compared to younger users.
How Do These Scams Work?
Scammers often initiate contact by claiming the victim’s computer is infected with malware or that their bank account is linked to criminal activity such as drug trafficking or money laundering. Posing as representatives from legitimate agencies—including the FTC or IRS—they create a sense of urgency and authority.
They then instruct victims to withdraw cash from their bank accounts and use nearby Bitcoin ATMs to send funds. Using SMS-sent QR codes, victims scan and transfer money directly into the scammer’s digital wallet—transactions that are irreversible.
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Official Warning: No Legitimate Agency Will Demand Bitcoin Payments
The FTC issued a clear warning: “Never trust anyone who tells you to use a Bitcoin ATM to protect your money or resolve an issue. Real companies and government agencies never demand payment via cryptocurrency. Anyone who does is a scammer.”
Experts advise consumers to remain skeptical of unsolicited calls or messages demanding immediate action. Law enforcement typically communicates through official letters—not urgent phone calls demanding cryptocurrency payments.
Frequently Asked Questions (FAQ)
Q: Why did so many people get liquidated during this price drop?
A: Many traders use leverage when investing in crypto. When prices move sharply against their positions—especially in volatile markets—exchanges automatically close those positions to prevent further losses, resulting in mass liquidations.
Q: Are Bitcoin ETF outflows a sign of long-term bearishness?
A: Not necessarily. While outflows reflect short-term caution, they don’t always predict long-term trends. Market participants may be rebalancing portfolios ahead of economic data or geopolitical events rather than abandoning Bitcoin entirely.
Q: How can I avoid falling for a Bitcoin ATM scam?
A: Never follow instructions from unknown callers asking you to buy crypto via ATM. Legitimate organizations won’t demand payment in Bitcoin. Always verify claims independently and report suspicious activity to the FTC.
Q: Is it safe to use Bitcoin ATMs at all?
A: Yes—if used properly and voluntarily. Bitcoin ATMs can be convenient for purchasing crypto with cash. However, never use them under pressure or because someone else told you to do so.
Q: What should I do if I’ve already sent money via Bitcoin ATM to a scammer?
A: Act immediately. Contact your bank if cash was withdrawn fraudulently, report the incident to the FTC at ReportFraud.ftc.gov, and consider filing a police report. Unfortunately, once crypto is sent, recovery is extremely unlikely.
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Final Thoughts
The recent market correction underscores the dual challenges facing cryptocurrency users today: price volatility and rising fraud risks. While macroeconomic forces influence trading patterns and ETF flows, individual investors must also remain vigilant against evolving scam tactics.
As adoption grows, so too does exploitation by bad actors. Education, skepticism toward unsolicited contact, and secure transaction practices are essential defenses.
Whether navigating market swings or avoiding social engineering traps, staying informed is the first step toward financial resilience in the digital age.
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