June 6, 2025 report
Yesterday, U.S. stocks rose slightly due to the smooth communication between China and the U.S.
However, following the public feud between Musk and Trump on social media, market sentiment plummeted, with Tesla's stock price crashing by 14.26%, and Bitcoin also retracing to $100,372 along with U.S. stocks.
In the past 24 hours, the market experienced liquidations of $982 million, with long positions liquidated at $889 million and short positions at $92.75 million, primarily driven by long position liquidations.
Why has it dropped so badly?
It is mainly the public conflict between Musk and Trump that has disrupted market sentiment; this drop feels more like an emotional release rather than a trend reversal.
Last week, a bunch of positive news couldn't push the market up. The tariff war, internal judicial struggles, and delayed external negotiations have left the market exhausted, and expectations for Circle's listing have also been digested.
Although U.S. stocks are relatively stable fundamentally, the downward trend is obvious. The two market turning points in February and April both reacted first in U.S. stocks, with the crypto market suffering as a result.
The feud between Musk and Trump has short-term severely impacted Tesla, but in the long run, it may shake U.S. political and business relations, with everyone in a cautious wait-and-see state.
From the data, even though Bitcoin almost dropped below $100,000, the turnover rate is not high, mainly due to short-term loss investors selling off, while early investors are still observing, with no evident panic.
The amount of Bitcoin held on exchanges has not significantly increased, indicating that market sentiment is still acceptable. The movements of Asian investors are worth watching to see if they are bottom fishing or fleeing.
As the feud between Trump and Musk continues to escalate, market sentiment is worsening, with the fear and greed index dropping from 55 to 46. It seems we need to wait for this drama to settle down to stop the decline.
From the support level, $100,500 to $105,000 is primarily held by short-term holders who are more sensitive to negative news and prone to selling.
The range of $93,000 to $98,000 is strong support, and I will buy in batches if it drops to this range.
From the funding data, on-site funds increased by 2 billion, with a total of 253.2 billion. The market cap of USDT increased by 113 million, and USDC increased by 23 million. Trading volume has significantly increased, but overall market liquidity is low and activity is not high.
The current price is mainly reliant on a reduction in selling pressure rather than an increase in buying, and if negative news exacerbates selling, the price may continue to decline.
However, this downturn does not have a fundamental impact on Bitcoin; it is more a release of emotions from U.S. stock investors.
Next, we can pay attention to the non-farm payroll data released tonight. If the data meets expectations, it may alleviate market sentiment and bring about short-term recovery.