1. Excessive Leverage
After Bitcoin surged past its all-time high, open interest spiked to levels not seen since December 2024. At the same time, funding rates became extremely elevated—signaling extreme bullish sentiment. Historically, when traders become overly confident, large investors often trigger a sell-off to flush out overleveraged long positions.
2. Trump's Tariff Threats
Donald Trump announced potential tariffs—25% on Apple products and 50% on EU goods starting June 1. This rattled global markets, leading to a sharp decline in stock futures. Bitcoin, often mirroring traditional markets in volatile moments, dropped in response.
3. Federal Reserve Concerns
A recent statement from a Fed official suggested that interest rates might rise if concerns around U.S. fiscal health intensify. While actual rate hikes are unlikely, even the mention of tighter monetary policy can unsettle investors and weigh on risk assets like Bitcoin.
