Why did the crash hit so hard?
Leveraged Liquidations in a Chain Reaction:
There are too many people playing high-leverage contracts in the Bitcoin market. Once the price breaks through a key level, a large number of long positions are immediately liquidated. For example, on June 6, a large trader named James Wynn had a 40x leveraged long position forcibly closed, losing over $16 million in one go, and the total amount of liquidations worldwide that day was close to $1 billion. This kind of cascading liquidation can make a downturn spiral out of control like a snowball.
Policy News Keeps Fluctuating:
The attitude of the Trump administration is like a "bad boyfriend" — they say they support Bitcoin, but the actual policies are hesitant and indecisive. At the end of May, the news of the temporary suspension of tariffs between China and the U.S. caused Bitcoin to surge, but in early June, Trump and Musk suddenly publically clashed, causing the two major "crypto influencers" to fall out, and market confidence collapsed instantly, with Bitcoin plummeting below $102,000.
Institutions Are Secretly Changing Hands:
Don’t be fooled by big institutions like BlackRock buying Bitcoin spot ETFs; they are also actively trading in the short term. For instance, when Bitcoin failed to reach $90,000 at the end of March, ETF funds saw a net outflow of over $5 billion for three consecutive weeks, clearly indicating that institutions were selling off at high levels. When they exit, market liquidity is drained.
What’s Next?
Pessimistic Scenario: Dropping towards $100,000 or even lower
If the price cannot hold the key support level of $104,000, it is likely to continue descending to find liquidity. The next target would be the psychological barrier of $100,000, and it might even drop to $95,000. After all, market sentiment is sensitive now, and any negative news could trigger another wave of selling.
Optimistic Scenario: After consolidating at a high, breaking new highs
If it can hold above $104,000 while digesting selling pressure, and with institutional funds flowing back in, compounded by expectations of interest rate cuts from the Federal Reserve in the second half of the year, Bitcoin may still gain momentum to break previous highs. Standard Chartered even set a target of "$200,000 by the end of the year," citing that long-term funds like U.S. pensions and public companies are entering the market.
Wait for a Clear Direction Before Acting:
Currently, the tug-of-war between bulls and bears is too intense, so it’s better to lie low and observe. Focus on two key signals: whether ETF funds will resume inflows + whether Bitcoin can stabilize above $104,000.
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