June 12, 2025 Report
Both US stocks and Bitcoin saw a decline early this morning, mainly due to the heightened tensions in the Middle East triggering market risk aversion.
The US Embassy in Iraq is preparing to evacuate, the State Department has authorized personnel to leave multiple Middle Eastern countries, and the Department of Defense has allowed military families to voluntarily leave Middle Eastern bases.
Additionally, the Israel Defense Forces are on high alert, and the Iranian Revolutionary Guard has stated it is ready with upgraded missiles. These messages combined have created a certain level of panic among investors, increasing risk aversion.
Especially as Trump expressed growing lack of confidence in the Iran nuclear negotiations during an interview, the market fears a breakdown in talks, which could even escalate the conflict between Israel and Iran, leading to declines in US stocks and Bitcoin.
Although the CPI data for May released last night was below market expectations, which is somewhat positive, the negative impact of the Middle East situation is clearly stronger, overshadowing this good news.
However, this is somewhat similar to the brief pullback during the Afghanistan withdrawal in 2021; investor sentiment remains relatively stable, and the fear and greed index is still around 61.
From Bitcoin data, the turnover rate is continuously decreasing, and short-term investors are reducing their holdings, but the impact is not significant.
Over 4.4 million wallets hold more than 0.1 Bitcoin, setting a historical high, indicating that retail investors are still entering the market.
From a support level perspective, short-term support is at $100,500-$105,000, where 1.7 million Bitcoins are accumulated, mainly by short-term holders.
The strongest support is between $93,000-$98,000, where most are long-term holders who generally do not move their holdings. As long as they do not panic sell, the decline will not be too large.
From a funding perspective, on-site funds have decreased by $200 million, USDT and USDC market caps have slightly declined, the Asian market has seen capital outflows for the first time this week, and the inflow of funds in the US market is also weak, with overall data being on the weak side, requiring further observation.
Additionally, the battle between Trump and Musk ended with Musk apologizing, and Trump accepted the reconciliation. However, their relationship is unlikely to return to what it was, as it is now more about mutual interests.
A mediator is involved, Musk is concerned about political retaliation, and Trump also needs to consider immigration issues in California, so neither side will completely fall out for now.
Overall, in the past week, the market has still been primarily influenced by Trump, whether it’s geopolitical conflicts, tariff issues, or his battle with Musk, all of which cause the market to fluctuate.
However, the impact of geopolitical conflict on US stocks and the crypto market is limited; future trends will depend on whether there will be real conflict in the Middle East.
The next focus of the market will still be on US-China trade negotiations and the Federal Reserve's monetary policy.
