In recent days, Bitcoin has experienced a sharp decline under mounting bearish pressure. On June 3, 2025, the crypto recorded a modest dip of 0.45%, followed by a 0.65% drop the next day. By June 5, Bitcoin’s price had fallen significantly by 3.05%.
Source: CoinMarketCap
Historically, a downturn in Bitcoin often triggers broader market weakness, and the current trend is no exception. At the time of writing, the total cryptocurrency market capitalization had dropped to $3.22 trillion, reflecting a 1.96% decline. In contrast, trading volume surged to $140.21 billion, marking an increase of over 20%.
The sudden shift from bullish to bearish sentiment has sparked widespread debate and speculation. The most prominent narrative attributes the market dip to the ongoing public dispute between the U.S. President and Tesla CEO Elon Musk.
The ripple effect of this tension is evident across major altcoins. Ethereum has dropped by 5.35% intraday, Dogecoin has fallen 7.09%, Official Trump is down 10.70%, BNB slipped 4.13% to $642.15, and Solana recorded a 3.17% decline.
What went wrong between Elon Musk and Donald Trump?
As per a few media reports, Elon Musk, the owner of Tesla, was one major donor of Donald Trump’s victory, and a few reports claim that he donated around $300 million to help Trump win.
Following Trump’s victory, he appointed Musk to lead DOGE (Department of Government Efficiency) alongside Vivek Ramaswamy, aiming to reduce federal spending and reduce bureaucracy.
A dozen times since February this year, Elon Musk has visited the White House several times, and in meetings, they have presented each other with an image of friends in the media.
Yet as June 2025 began, the media reported the criticism by Elon of the big government spending bill, ‘ Big Beautiful Bill.’ He slammed the bill because he argued that it would add $2.4 trillion to the U.S debt and remove tax breaks for electric vehicles.
As per an X post from the official account of Trump War Room, Donald Trump said while talking to FOX news that, “ Elon has never asked me for a thing. I mean, I got rid of the EV mandate … but he’s never asked me for a thing. I think that’s an amazing attribute … Elon is a patriot, we want to thank you very much for the job you’re doing.”
Amid ongoing political tensions, speculation is rising that Elon Musk may be considering the creation of a new political party. The discussion gained momentum after Musk posted a poll on X, asking, “Is it time to create a new political party in America that actually represents the 80% in the middle?” The poll received overwhelming support, with 81% of respondents voting “Yes” and only 19% voting “No.”
How does the public feud between Musk and Trump harm crypto?
The ongoing public feud between Musk and Trump has introduced significant volatility and uncertainty in the crypto market, with potential short-term and long-term impacts.
Causing immediate market turbulence, the high-class feud eroded over $1 billion in the past 24 hours, and seven major cryptos, including Dogecoin, Bitcoin, Ethereum, and Official Trump, lost a huge portion of their prices.
Also, the feud has likely fueled negativity over the Coinbase Prime Index, signalling bearish sentiment among U.S institutional investors and whales, amplifying sell-off and liquidation.
It is widely argued that since Musk was a major proponent of deregulation alongside supporters like Howard Lutnick, his weakened influence in Trump’s government may erode policies that support crypto.
According to the data from CoinGlass in the past 24 hours, 220,363 traders were liquidated, the total liquidations came in at $980.10 million, the largest single liquidation order happened on Bitmex – XBTUSD, valued at $ 10.00 M.
A major liquidation event occurred with Bitcoin long liquidation reaching $222 million due to the price drop from $110k to $104k. Earlier in the week, liquidation was moderate with $142.52 million on June 02 and $22.17 million on June 04.
