Bitcoin experienced a sudden 5% flash crash, dropping to $118,000 on August 14, 2025, resulting in $577 million in liquidations within an hour. This sharp decline highlights the inherent volatility of the cryptocurrency market, where rapid price movements can lead to significant investor losses. The incident underscores the importance of risk management strategies for traders in the digital asset space, as the market's unpredictable nature continues to pose challenges for investors.