Author: 1912212.eth, Foresight News
The crypto market is changing rapidly. On the evening of June 5, around 8 PM, BTC once approached $106,000, but after failing to break through, it continuously fell. By around 4 AM on June 6, BTC dropped to $100,372, nearly falling below the $100,000 mark, and has since rebounded to around $102,000. ETH has consistently failed to break through $2,800 and also fell last night, dipping to a low of $2,381, with a 24-hour decline of over 7%, and altcoins also fell across the board.
In terms of contract data, according to Coinglass, the entire network saw liquidations of $983 million in the last 24 hours, with long positions liquidating $892 million. The largest single liquidation occurred in Bitmex - XBTUSD, valued at $10 million.
At the close, the Dow Jones Industrial Average fell 108.00 points to 42,319.74 points, a drop of 0.25%; the S&P 500 Index fell 31.51 points to 5,939.30 points, a drop of 0.53%; the Nasdaq fell 162.04 points to 19,298.45 points, a drop of 0.83%. Tesla plummeted over 14% due to the clash between Musk and Trump, setting a record for the largest single-day drop in history.
After BTC reached an all-time high, altcoins did not continue to rise as expected, and the continuity of the market has been disrupted. What are the reasons for this major pullback?
Musk and Trump are at odds with each other.
On June 4, Musk made a rare public outcry on his social platform X (formerly Twitter), criticizing a core bill pushed by the Trump administration as 'an abominable monstrosity.' The world's richest man wrote, 'Sorry, I just can't watch anymore. This huge, ridiculous, and self-serving congressional bill is simply an abominable monstrosity!' He even called on lawmakers to 'kill the bill.' Subsequently, Musk even shared a tweet discussing 'Trump should be impeached and replaced by JD Vance' and commented 'Yes.'
Trump also did not back down, posting on his personal social platform, 'I don't mind Musk opposing me, but he should have done it months ago. This is one of the greatest bills ever submitted to Congress. It represents record spending cuts of $1.6 trillion and the largest tax cuts in history. If this bill does not pass, taxes will increase by 68%, and there are worse things. I didn't create this mess; I'm just here to fix it. This bill puts our country on the path to greatness. Make America Great Again!'
Due to the clash between Musk and Trump last night, Tesla plummeted over 14%, shrinking its market value by $153 billion, setting the record for the largest single-day drop in market value in history. Musk holds about 12.8% of Tesla's shares, and as a result, this portion of shares has lost over $19.5 billion in value.
The wealthiest and most powerful people on earth are clashing, causing turmoil in the US stock and crypto markets.
After Bitcoin broke its new high, investors are taking profits.
Recently, Bitcoin broke its all-time high (ATH), leading to a significant increase in locked profits, with an average profit of about 16% per Bitcoin. Less than 8% of trading days can bring higher profits than this, indicating that investors are entering a clear profit-taking phase.
According to glassnode data, investors holding BTC for at least 12 months achieved an average daily profit of over $1 billion last week — the fifth largest increase in this cycle.
Well-known analyst Willy Woo also stated that he holds more than 10,000 Bitcoin whales, which have been selling since 2017. Most of these Bitcoins were bought between $0 and $700, held for 8 to 16 years.
The profit-taking by whales and traders has undoubtedly created significant selling pressure on the market; if buying power is weak, a price decline is inevitable.
The summer has generally performed poorly, with an average return of only 1.9% in June.
The crypto market often mirrors the stock market, exhibiting seasonal trends. For example, the summer market generally performs poorly, while the year-end and beginning of the year perform well.
Since 2020, BTC has often seen more declines than gains in June. Historical data shows that the average return in June is only 1.9%, with a probability of increase at 50%.
Under the market's metaphysical effects, some investors and traders choose to stand aside and observe.
The Federal Reserve's interest rate cut may be delayed until September this year.
The Federal Reserve's delay in cutting interest rates adds a shadow to the already tense liquidity in the crypto market. After last week's unemployment claims data was released, the prices of federal funds futures linked to the Fed's meeting showed a shift in market sentiment towards dovishness, with the current expectation that the Fed will cut rates by 0.25 percentage points for the first time at the September meeting. Looking further ahead, the market's expectation for the total rate cut for this year has risen to 60 basis points, up from 56 basis points.
Federal Reserve Governor Christopher Waller stated on Sunday during a speech that he tends to believe that inflation caused by tariffs may be a one-time shock, and the Fed may still cut rates before the end of the year. However, other Federal Reserve officials believe that it cannot be asserted at this time, and caution is needed regarding interest rate cuts.
One of this year's 'ticket committee' members, Chicago Federal Reserve Bank President Austan Goolsbee, stated at an event in Iowa on Tuesday that it cannot be asserted that the impact of tariffs on inflation is only temporary. Current inflation data may not yet reflect the impact of tariffs, complicating the Federal Reserve's task of assessing future inflation trends.
Subsequent trends
On May 30, Willy Woo stated that if Bitcoin does not show a rebound in the next two and a half days, it will form a bearish divergence on the weekly chart, and the market may fall into a prolonged period of sluggish volatility. He jokingly said, 'We will feel bored for several weeks.'
Weiss Crypto tweeted that BTC's short-term support range is $98,000 to $94,000, with major support/resistance at $89,500.
Trader Eugene Ng Ah Sio stated in his personal channel, 'Currently long on Ethereum, stop-loss set at the low point of this morning's shadow line of $2380 (this position is also the mid-term timeframe range bottom retest), the technical structure is clear.'
