Cryptocurrency Market Under Siege: The Fallout from the Musk-Trump Feud
The cryptocurrency market recently plunged into chaos, marked by a notable downturn fueled by high-profile conflicts and financial liquidations. The total market valuation dipped by 3.03%, settling at approximately $3.2 trillion. This seismic shift sent shockwaves through the industry, leading to a sharp decrease in the prices of major cryptocurrencies.
Bitcoin and Ethereum Take a Hit
In just a few hours, Bitcoin experienced a steep decline, dropping to $101,928.79. Ethereum was not spared either, falling by 3.73% to $2,489. Ripple’s XRP also faced a slide, dipping 3.34% to $2.13. As these cryptocurrencies test their critical support levels, the risk of a larger downturn looms ominously over the market.
1. Crypto Liquidations of Over $595 Million
The past 24 hours saw over $595 million in liquidations across the crypto landscape. According to data from liquidation heat maps, this led to more than 156,000 traders being caught off guard as major assets like Bitcoin and Ethereum plummeted. Notably, the largest liquidation event occurred on Binance, where an ETH/USDT pair experienced a massive sell-off of $9.48 million.
In terms of specifics, Bitcoin and Ethereum accounted for over $314 million in liquidations, with Bitcoin contributing $171 million and Ethereum $143 million. Also impacted were other significant assets like Solana, Dogecoin, and XRP, with liquidations totaling $40 million, $22.52 million, and $16.6 million, respectively.
In a striking trend, the majority of liquidations—over $547 million—were long positions, indicating a surprise for bulls who believed in a rally. Conversely, short liquidations amounted to only $50.08 million, arming skeptics with a rather favorable position.
2. Elon Musk vs. Donald Trump Feud Intensifies
The market turmoil can be significantly attributed to the escalating feud between Elon Musk and Donald Trump. Historically allies during the election, their recent public disagreements have sent ripples throughout various financial markets, including cryptocurrencies.
Musk has made his stance abundantly clear, urging Trump with a tweet stating, “Call your Senator. Call your Congressman, Bankrupting America is NOT ok! KILL the BILL.” Following Musk’s provocative message, Trump returned fire, asserting that ending Musk’s federal support could save the U.S. “billions.”
The immediate aftermath was swift: Tesla’s stock plummeted over 17%, erasing approximately $100 billion in market capitalization. This negative sentiment further contributed to a crash in the crypto market, as investors scrambled to react to the shifting economic landscape.
“One Big Beautiful Bill,” Musk proclaimed, showcasing the intensity of their conflict.
The public exchange between these two influential figures speaks volumes about the risky intertwining of traditional finance and rapidly evolving digital assets.
3. Crypto Whales Dump BTC, ETH, XRP Among Others
Adding to the bearish atmosphere, recent reports from Whale Alert highlighted significant sell-offs by crypto whales. In one notable transaction, a single whale offloaded 917 BTC worth $94.30 billion to Coinbase Institutional within just one hour. Additionally, a substantial holder transferred 26.67 million XRP to Coinbase, reinforcing bearish sentiment among investors.
Large crypto movements from wallets to exchanges typically suggest impending sell-off actions, and these transactions might have exacerbated the decline in the crypto market. Coupled with macroeconomic pressures—especially the lack of signals from the U.S. Federal Reserve regarding interest rate cuts—the atmosphere felt increasingly volatile.
Moreover, in another concerning transfer, a staggering 2.86 trillion Shiba Inu (SHIB) tokens were moved to Coinbase Institutional, further indicating a broader trend of sell-offs that seem to be prevalent across multiple platforms.
In light of these developments, market stakeholders are left to navigate the aftershocks of these significant events, as the interplay between high-profile personal conflicts and economic realities brings both challenges and uncertainties to the crypto arena.
