Crypto Bloodbath: Why Digital Assets Are Taking a Beating Today
Another red day in crypto land—traders woke up to portfolios bleeding like a Wall Street intern's first pitch deck. Here's what's driving the sell-off.
Macro Mayhem Strikes Again
Fed jitters, inflation whispers, and that age-old combo of institutional greed and retail panic. Classic.
Liquidity Ghost Town
Market makers pulled bids faster than a VC dodging a 'when moon?' DM. Thin order books = exaggerated moves.
Bonus Cynical Jab
Meanwhile, hedge funds are 'buying the dip' with your exit liquidity. Stay sharp out there.
Crypto prices plunged sharply today. Bitcoin fell to $102,836, down 1.86% in early trading hours. Bitcoin price tanked from $105,000 to below $102,000, Ethereum tumbled 6.18% to $2,455.68 according to Coinmarketcap data. Dogecoin slid over 7% to $0.175.
Across derivatives platforms, more than $800 million in Leveraged long positions were liquidated within hours. In total, close to $1 billion in crypto derivatives vanished as prices collapsed.
Investors scrambled to exit risky assets. The catalyst: a public feud between President Donald TRUMP and Tesla CEO Elon Musk.
Their clash spilled into markets, triggering a wave of sell-offs. This analysis unpacks the data driving today’s downturn, explains the chain reaction across assets, and highlights implications for market stability.
Trump–Musk Feud Roils Crypto Prices
Earlier this week, Musk criticized Trump’s proposed “One Big Beautiful Bill.” He called it a “corporate straitjacket.” Trump fired back on June 5, threatening to cancel federal contracts with Musk’s companies, including Tesla and SpaceX.
Musk responded the same day with a string of posts on X, accusing Trump of authoritarian tactics. By June 5, investors were dumping everything from meme coins to megacap stocks.
Elon Musk’s influence on crypto is well documented. Dogecoin, which Musk frequently posts about, fell to $0.175—a 7% drop.
Meme tokens tied to Trump also suffered. Trump Coin lost 12% of its value in hours of trading. Brokers reported unusually high sell orders on exchanges like Binance and Coinbase immediately following the Trump–Musk exchange.
Crypto Liquidations Rise as Risk Appetite Fades
As crypto prices slumped, leveraged traders faced rapid margin calls. Long positions bore the brunt: over $870 million of longs were liquidated in 24 hours across major venues such as Binance, Bybit, and OKX per Coinglass data. Shorts fared slightly better, with roughly $107 million in short‐side liquidations—still a significant loss.
Crypto derivative open interest (OI) plummeted by 15% within hours, signaling capitulation among leveraged bulls. Open interest in Bitcoin futures fell from $17 billion to $14.5 billion.
Ethereum futures OI dropped from $11 billion to $9 billion. This forced liquidation deepened the sell-off, as forced selling hit spot order books and auctioned off collateral at depressed prices.
It wasn’t just crypto prices. Tesla shares plunged 15% on June 5—the stock’s worst single‐day performance since September 2020—erasing more than $150 billion in market cap according to Yahoo Finance data.
Investors cited Trump’s threat to cancel SpaceX and Tesla contracts. That risk-off sentiment spread to equities tied to Musk.
Bitcoin price decline to $100,800 marked a 9.9% drop from its May high of $111,880. Ethereum’s slide to $2,455.68 represented an 8.4% retreat from its May 30 peak of $2,680. Even blue-chip altcoins suffered: solana down 5%, XRP down 4%, BNB down 4%.
Broader Implications for Crypto Stability
Today’s turmoil underscores a growing reality: crypto markets are increasingly sensitive to political high-jinks. Influential figures like Musk and Trump now wield direct sway over crypto prices.
When their public spats enter the spotlight, market participants react in real time. As the Trump–Musk conflict shows no sign of abating, markets may remain on edge.
The next round of tweets or executive moves could spark another leg down. For now, crypto traders and traditional investors alike must navigate an environment where political drama bleeds directly into crypto prices.
