Political tensions between the President and Tesla CEO spark crypto market volatility, with Bitcoin nearly testing $100,000 support level
June 6, 2025
Bitcoin investors experienced a painful 24-hour period as the world’s largest cryptocurrency plunged nearly 3%, approaching a critical retest of the $100,000 psychological support level. The dramatic selloff coincided with an escalating public feud between US President Donald Trump and billionaire entrepreneur Elon Musk, creating a perfect storm that caught long traders off guard.
Market Carnage Unfolds
The cryptocurrency’s volatile session saw Bitcoin surge to $105,915 before rapidly declining to $100,500 within hours, according to CoinMarketCap data. As of publication, Bitcoin has stabilized around $102,180, but the damage to leveraged positions was already done.
Approximately $308 million in Bitcoin long positions were liquidated during the turbulent period, data from CoinGlass reveals. This represents a significant portion of the broader cryptocurrency market’s total liquidations, which reached $982.55 million over 24 hours, with long positions accounting for $891.63 million of that figure.
The selloff wasn’t confined to Bitcoin alone. Other major cryptocurrencies experienced similar pressure, with Ethereum dropping 7.25% to $2,458, XRP falling 4.35% to $2.13, and Solana sliding 5.20% to $147.11.
The Trump-Musk Confrontation
The market turmoil intensified alongside a very public dispute between President Trump and Musk. The conflict reached a boiling point when Musk took to his X platform on June 5 to criticize Trump’s proposed sweeping global tariffs, warning they “will cause a recession in the second half of this year.”
The Trump tariffs will cause a recession in the second half of this year https://t.co/rbBC11iynE
— Elon Musk (@elonmusk) June 5, 2025
Trump fired back through his Truth Social platform, threatening to terminate Musk’s government subsidies and contracts, claiming such action would save “billions and billions of dollars” for the US government. The stakes are particularly high given SpaceX’s critical role in America’s space program.
Musk’s initial response was dramatic and concerning for national security. He declared that “in light of the President’s statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately.” However, he walked back this statement hours later, likely recognizing the implications for US space capabilities since Dragon is currently the only American-made spacecraft capable of transporting astronauts to space.
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
Analyst Concerns Mount
The political tensions have amplified existing concerns among cryptocurrency analysts about broader economic headwinds. Swyftx lead analyst Pav Hundal previously warned Cointelegraph that US policymakers might delay monetary easing until obtaining “hard data” on Trump’s tariff impacts, potentially triggering a “growth slowdown.”
These macroeconomic worries align with technical analysis suggesting Bitcoin faces resistance. Crypto analytics firm Glassnode noted in a June 5 market report that “with long-term holders gradually applying sell pressure, the probability of a short-term correction continues to build, particularly in the absence of a strong upside catalyst to push Bitcoin decisively above [$111,800].”
Also Read: Trump Jr. Goes “All In” on Bitcoin After Family Banking Restrictions
Long-Term Holders Take Profits
Adding to the selling pressure, an increasing number of long-term Bitcoin holders have been liquidating positions since the cryptocurrency reached its all-time high of $111,970 on May 22. These holders, defined as those who have maintained positions for over 155 days, appear to be locking in substantial profits after Bitcoin’s remarkable rally.
This profit-taking behavior by experienced investors often signals market maturity but can create downward pressure during periods of uncertainty. The combination of political tensions, macroeconomic concerns, and natural profit-taking has created a challenging environment for Bitcoin bulls.
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Market Implications
The current situation highlights Bitcoin’s continued sensitivity to political developments and macroeconomic factors, despite its growing institutional adoption. The cryptocurrency’s correlation with traditional risk assets becomes particularly apparent during periods of political uncertainty.
For traders, the $308 million in liquidated long positions serves as a stark reminder of the risks associated with leveraged cryptocurrency trading. The rapid price movement from $105,915 to $100,500 demonstrates how quickly market sentiment can shift in the volatile crypto space.
The broader implications extend beyond immediate trading losses. If the Trump-Musk conflict continues to escalate, it could create ongoing uncertainty about government policy toward both the cryptocurrency sector and the broader technology industry.
Looking Ahead
Bitcoin’s ability to hold above the psychologically important $100,000 level will be crucial for market confidence in the near term. A decisive break below this threshold could trigger additional selling pressure and test lower support levels.
Meanwhile, the resolution of the Trump-Musk dispute will likely influence market sentiment. Any further escalation could exacerbate volatility, while a de-escalation might provide relief for cryptocurrency markets.
The situation underscores the complex interplay between politics, economics, and cryptocurrency markets in 2025, as digital assets continue to mature and attract attention from the highest levels of government and business.
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