U.S. President Trump and tech giant Elon Musk engage in a major confrontation, triggering a chain reaction in global financial markets.
Within the past 24 hours, the crypto market experienced significant volatility, with BTC price briefly falling below the critical support level of $101,000, the first time in a month, while Altcoins plummeted by 9.2%, with the meme coin Doge (DOGE), closely associated with Musk, experiencing the largest decline of 9.3%, dropping to its lowest level since May 7th. Other mainstream tokens like Avalanche and Solana also declined, falling 7% and 6.2% respectively.
The total crypto market capitalization dropped 4.3% to $3.36 trillion. According to CoinGlass liquidation data, approximately $965 million was liquidated in the past 24 hours, primarily long positions.
Market analysts generally believe this pullback is closely related to political turmoil in Washington.
Musk posted over ten tweets criticizing Trump. BitBull Capital CEO Joe DiPasquale commented on X platform: "The crypto market is responding to political uncertainty. The public conflict between Trump and Musk has intensified investor concerns, especially when economic data already shows signs of weakness. This dispute originated from Musk's sharp criticism of Trump's latest budget proposal, to which Trump threatened to cancel government contracts held by this billionaire."
Additionally, the latest ADP employment report shows that private sector employment increased by only 37,000 in May, far below April's 60,000 increase and the Dow Jones estimated 110,000, marking the weakest monthly employment growth since March 2023.
This survey was released on the same day Trump's latest metal tariffs took effect, further unsettling investors.
Analysts predict that the crypto market may continue to remain volatile until political and economic uncertainties are resolved. DiPasquale noted: "BTC should find support around $100,000, but Altcoins might face greater pressure. Investors need to closely monitor U.S. trade policy direction and macroeconomic data."
From a technical perspective, BTC recently broke through $110,000, reaching a new all-time high, and the current pullback is interpreted as a healthy consolidation.
According to glassnode's June 5th report, BTC is experiencing pressure from experienced holders' profits, and if it falls below six digits, it must maintain the critical $95,600 support level to maintain a bullish momentum.
glassnode's cumulative transaction volume increment heatmap shows spot-driven cumulative intervals at $81,000-$85,000, $93,000-$96,000, and $102,000-$104,000 regions, which are assessed as potential demand zones due to previous significant buying activity. The report emphasizes that after breaking $103,700, the next major support is the psychological price of $100,000, and if it continues to fall, the support is $95,600.
Notably, despite short-term pressure, most analysts remain optimistic about BTC's long-term prospects. However, for Altcoins dependent on market risk appetite, the coming weeks may present greater challenges.
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