Original author: 1912212.eth, Foresight News
The crypto market is changing rapidly. At 8 pm on June 5, BTC once approached $106,000. After failing to break through, it continued to fall. At 4 am on June 6, BTC once dropped to $100,372, almost falling below the $100,000 mark. It has now rebounded to around $102,000. ETH has never been able to break through $2,800, and it also fell all the way last night, with a minimum of $2,381, a 24-hour drop of more than 7%, and altcoins generally fell.
In terms of contract data, according to Coinglass, the total liquidation of the entire network in the last 24 hours was US$983 million, of which long orders were US$892 million. The largest single liquidation occurred on Bitmex - XBTUSD was worth US$10 million.
As of the close, the Dow Jones Industrial Average fell 108.00 points to 42,319.74, a drop of 0.25%; the SP 500 fell 31.51 points to 5,939.30, a drop of 0.53%; and the Nasdaq fell 162.04 points to 19,298.45, a drop of 0.83%. Tesla fell more than 14% due to the conflict between Musk and Trump, setting a record for the largest single-day drop in history.
After BTC hit a record high, the altcoin did not continue to rise as expected, and the market sustainability was broken again. What are the reasons for this major pullback?
Musk and Trump exchanged insults
On June 4, Musk made a rare public attack on his social platform X (formerly Twitter), calling a core bill pushed by the Trump administration a disgusting deformity. The worlds richest man wrote: Im sorry, I just cant stand it. This huge, outrageous, and full of private goods congressional bill is simply a disgusting deformity! He even called on lawmakers to kill the bill. Later, Musk even reposted a discussion tweet about Trump should be impeached and replaced by JD Vance and commented Yes.
Trump was not to be outdone, and posted on his personal social platform, I dont mind Musk opposing me, but he should have done so months ago. This is one of the greatest bills ever submitted to Congress. This is a record spending cut of $1.6 trillion, and the largest tax cut in history. If this bill is not passed, taxes will increase by 68%, and there will be worse things than this. I didnt make this mess, Im just here to fix it. This bill will put our country on the road to greatness. Make America great again!
Due to the quarrel between Musk and Trump last night, Teslas stock price fell by more than 14%, and its market value shrank by $153 billion, setting a record for the largest single-day drop in market value in history. Musk holds about 12.8% of Teslas stock. As a result, the market value of this part of the stock has shrunk by more than $19.5 billion.
The richest and most powerful people on the planet are at loggerheads with each other, causing turmoil in the U.S. stock and crypto markets.
Investors are taking profits after Bitcoin breaks to new highs
The recent breakthrough of Bitcoins all-time high (ATH) has led 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 who held BTC for at least 12 months realized an average daily return of more than $1 billion last week - the fifth largest increase this cycle.
Well-known analyst Willy Woo also published an article stating that whales holding more than 10,000 bitcoins have been selling since 2017. Most of them bought bitcoins between $0 and $700 and held them for 8 to 16 years.
The profit-taking by whales and traders will undoubtedly create huge selling pressure on the market. If buying is weak, price decline is inevitable.
The summer was generally bleak, with the average return in June being only 1.9%
Crypto markets tend to show seasonal trends similar to stock markets, with markets generally performing poorly in the summer and performing well at the end and beginning of the year, for example.
Since 2020, BTC has tended to fall more than rise in June. Historical data shows that the average return in June is only 1.9%, and the probability of rising is 50%.
Under the market metaphysical effect, some investors and traders choose to leave and wait and see.
The Fed may delay its rate cut until September this year
The Feds delay in cutting interest rates has added a gloom to the already tight liquidity in the crypto market. After the release of the first unemployment claims data last week, the price of the federal funds rate futures linked to the Feds meeting period showed that the market mentality has turned dovish. It is currently expected that the Fed will 100% cut interest rates by 0.25 percentage points for the first time at the September meeting. In the longer term, the markets expectation for the total interest rate cut this year has risen to 60 basis points, from 56 basis points previously.
In a speech on Sunday, Christopher Waller, a member of the Federal Reserve Board, said he tends to believe that inflation caused by tariffs may be a one-time shock and that the Fed may still cut interest rates before the end of the year. However, other Fed officials believe that it is not possible to make such a conclusion at this time and that interest rate cuts need to be cautious.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago and one of this years voting committee members, said at an event in Iowa on Tuesday that it is too early to say that the impact of tariffs on inflation is only temporary. Current inflation data may not yet reflect the impact of tariffs, which complicates the Feds task of assessing future inflation trends.
Subsequent Trends
On May 30, Willy Woo wrote that if Bitcoin does not rebound in the next two and a half days, a bearish divergence will form on the weekly chart, and the market may then fall into a long period of low volatility. He jokingly said, We will be 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 posted on his personal channel, Currently long Ethereum, with a stop loss at this mornings lower shadow low of $2,380 (which is also the bottom retest of the mid-term time frame range), and the technical structure is clear.
