Crypto Bloodbath: Trump-Musk Feud, Fed Panic & Why the Market’s Tanking

Crypto's taking a beating today—and the usual suspects are lining up to take the blame. Here's what's rattling the cages.

Elon vs. The Don: A Tweetstorm of FUD

Musk's latest AI rant clashed with Trump's anti-crypto broadside, sending traders scrambling. When egos collide, portfolios bleed.

Fed Fumbles the Soft Landing

Rate-cut hopes evaporated faster than a shitcoin's liquidity after Powell's "higher for longer" remarks. The algos went berserk.

Bonus Trauma:

Whales dumping BTC ETFs, a suspicious Binance outflow, and—because why not—another stablecoin audit delay. Just another Tuesday in crypto wonderland.

Remember: The market always recovers. Your emotional trading decisions? Not so much.

Source: CryptoRank

Sui [SUI] and TRON [TRX] bumped slightly by 1.5% and 0.8% respectively in the past 24 hours. In short, the market performance was mixed (red and green). 

Market pundits linked the brief cool-off to Fed chair Jerome Powell’s recent hawkish speech at a European Central Bank (ECB) forum. 

What stirred crypto markets?

In its daily market update, crypto research firm Presto Research stated, 

“Powell confirmed at an ECB forum that the Fed likely WOULD have already started cutting rates if not for the inflationary impact of recent tariffs.”

Additionally, Powell stressed that the Fed was cautious, stressing a ‘data-dependent approach’ without committing to a preset timeline for cutting interest rates. 

That said, the current market consensus leaned towards a likely rate cut in September, meaning a potential strong risk-on catalyst at the end of Q3. 

In addition, Elon Musk and President Donald TRUMP renewed their spat as Republicans passed the controversial reconciliation bill, dubbed the One Big Beautiful bill (OBBB). 

Summarizing market reactions to early week updates, trading desk QCP Capital highlighted a sideways structure in the short term and noted,  

“Option markets show a modest uptick in BTC risk reversals, though implied volatility remains NEAR all-time lows. Basis and yields continue to reflect soft native sentiment, with most positioning now favouring accumulation and range-bound activity.”

Meanwhile, on a sector-wide performance, the DeFi segment dumped hardest with -4% on average. The sub-sector was also the slowest to bounce back in the past 24 hours. 

Some of the swiftest recoveries were seen across AI, L2s, and memecoin sectors, with an average of 1-3% pump per Velo data. 

Source: Velo

That said, with mixed performance, whale exits, and potential range-bound activity in the short term, BTC could react aggressively to liquidity pools. 

CoinGlass data marked out $105K and $103K as key liquidity levels that could be price magnets in case of a liquidation hunt. On the upper side of price action, $108K and $109K, were potential targets. 

Source: CoinGlass