This week has been turbulent for the crypto markets, with Bitcoin dipping below $102,000 and Ethereum falling to around $2,424. Hereโs a breakdown of the key reasons behind the decline:
1. Massive Liquidations
Over $595 million in leveraged crypto positions were wiped out in just 24 hoursโmostly long positions in BTC and ETH. This triggered a domino effect, deepening the sell-off across the market.
2. Elon Musk vs. Donald Trump Feud
A very public spat between Elon Musk and President Trump over government spending caused Tesla stock to plunge 14%, erasing $100 billion in value. The negative sentiment spilled into risk assets, including crypto.
3. Institutional Inflows Drying Up
Spot Bitcoin ETF inflows dropped by 77% week-over-week. With institutions pulling back, a major source of bullish momentum has stalled.
4. Macroeconomic Uncertainty
Sluggish U.S. GDP data and escalating U.S.-China trade tensions have pushed investors into safer assets, dragging down risk-heavy investments like crypto.
5. Seasonal Headwinds
June has historically been a weak month for crypto. Bitcoin has averaged just a 1.9% return this month over the past decade, while Ethereum often posts double-digit losses.
๐ While the short-term outlook is shaky, some investors see this dip as a potential long-term buying opportunityโespecially if macro conditions improve or the Fed shifts to a more dovish stance.
