Crypto Markets Tumble as Trump-Musk Alliance Implodes—Just Another Volatility Tuesday
Digital assets bled red across exchanges today as the much-hyped Trump-Musk partnership collapsed spectacularly—proving once again that crypto markets react faster to celebrity drama than actual fundamentals.
The bromance that briefly sent memecoins soaring now leaves traders nursing losses, with Bitcoin dipping below key psychological levels. Meanwhile, institutional investors quietly accumulate positions—because nothing fuels a bull market like retail panic.
As the dust settles, one truth remains: in crypto, the only permanent relationship is between volatility and opportunity. The suits on Wall Street will still find a way to profit from your emotional trading.
Donald vs Elon
The sharp decline appears to have been driven by a spat between US President Donald TRUMP and tech billionaire Elon Musk, who said the former’s tariffs “will cause a recession in the second half of this year,” and “Congress is spending America into bankruptcy!” on June 5.
As the war of words on each of their respective social media networks escalated, and the bromance collapsed, Musk also said:
“In light of the President’s statement about the cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately.”
In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately pic.twitter.com/NG9sijjkgW
— Elon Musk (@elonmusk) June 5, 2025
For more than a week, Elon Musk has been trashing Trump’s signature piece of legislation, a spending bill called One Big Beautiful Bill.
“I don’t mind Elon turning against me, but he should have done so months ago. This is one of the Greatest Bills ever presented to Congress,” said Trump on Truth Social.
However, the clearly riled billionaire Tesla CEO didn’t stop there, stating on X that it was “time to drop the really big bomb: Donald Trump is in the Epstein files.”
“That is the real reason they have not been made public. Have a nice day, DJT!”
BREAKING: President Trump’s former WHITE House Chief Strategist Steve Bannon calls for Elon Musk to be deported, per NY Times. https://t.co/Q82Pbhzppt
— The Kobeissi Letter (@KobeissiLetter) June 5, 2025
The pair started to cool off late on Thursday with Musk’s admissions that it may be time to reconcile.
$1B in Liquidations
There has been almost $1 billion in crypto liquidations over the last 24 hours, according to Coinglass. Around 228,000 traders were wrecked, almost 90% of them in BTC long positions, and the total liquidations were around $988 million, it noted.
However, analysts had predicted that a leverage flushout was overdue, with open interest on Bitcoin futures markets hitting all-time highs recently.
Bitcoin lost almost $5,000 in a matter of hours, falling to a 4-week low just below $101,000 in late trading on Thursday. However, it found support there and recovered marginally to reach $102,800 during Asian trading on Friday.
Analyst “CrypNuevo” said that a quick bounce from this level was unlikely and more consolidation could occur, unless the sell-off accelerates.
$BTC update:
Plan is playing out so far!
Let’s see if this psychological support ($100k) can hold.
A quick bounce is unlikely imo. I’d expect that, at best, a small consolidation in this area before any interesting MOVE could be the case – unless if we break below it fast. https://t.co/iWql8N6SW7 pic.twitter.com/CIb1KpJt8i
— CrypNuevo (@CrypNuevo) June 5, 2025
