Why did the crypto market collapse on June 5, 2025?
1. Impact from macroeconomics and the USD
The USD has weakened significantly amid signs of economic stagnation in the US. As fiat currency depreciates, concerns about inflation and recession increase, making investors more cautious. Rather than continuing to hold risky assets like crypto, many begin to withdraw capital or shift to safer investment channels.
2. Pessimistic sentiment and a wave of capital flight
The market's already fragile sentiment has been triggered by a series of negative news related to financial policy, tariffs, and political instability. This has led to a massive sell-off, especially among retail investors. As prices drop sharply, pressure spreads throughout the market and drags down large-cap assets.
3. Liquidation of leverage and domino effect
The price plunge has caused a series of leveraged positions to be liquidated, especially on derivative exchanges. Forced liquidations contribute further to the selling volume, creating a domino effect and causing prices to plummet deeper. This is one of the factors that led the market to drop quickly and significantly in a short time.
🔮 The next direction of the crypto market
1. Bitcoin has the potential to recover first
Bitcoin – with its scarcity and being viewed as 'digital gold' – may soon recover thanks to safe-haven capital. When traditional markets experience volatility, BTC is often seen as an alternative to preserve value. If the situation stabilizes, Bitcoin could be the first and strongest to recover.
2. Altcoins still under pressure
Unlike Bitcoin, most altcoins will still face selling pressure. Market polarization will become more apparent, only projects with real potential or significant capital support will be able to hold their ground. This period can be seen as a process of purging weak altcoins.
3. Dependent on global financial policy
The next direction of crypto will still depend heavily on macroeconomic developments – especially interest rate policies and actions from central banks. If major countries loosen monetary policy, capital may return to riskier asset markets, including crypto.