- $1B worth of positions were wiped out on the 5th of June.
- Profit-taking hit $1.5B per day, a trend that Glassnode flagged as a sign of local top.
Nearly $1 billion worth of crypto positions were wiped out on the 5th of June, as Elon Musk and President Donald Trump’s public spat spooked the markets.
In particular, Bitcoin [BTC] traders saw the largest losses, over $340M, with leveraged bulls accounting for the most liquidation of $305M.
Source: CoinGlass
The market bloodbath followed a heated debate on U.S. fiscal debt and the ‘Big Beautiful Bill.’ But the debate quickly turned into an ugly social ‘fight’ between Musk and Trump. In reaction, the market puked in fear.
What’s next for BTC?
The risk-off move dragged BTC to $100K for the first time since mid-May. However, hedge fund manager James Lavish castigated panic sellers for being ignorant of BTC.
“If you are selling Bitcoin because the richest man in the world is fighting with the most powerful leader in the world, you have absolutely no idea what you own.”
Here, he viewed BTC as a hedge against the fiscal debt fallout that sparked the Musk-Trump drama. In short, the crisis should be a buying opportunity and not a selling spree.
At press time, BTC rebounded to $103K following Musk’s acceptance to tone down the tension. But will the $100K hold ahead of Friday’s U.S. labor market update?
Source: BTC/USDT, TradingView
Most analysts expect Fed interest rate cuts in Q3, and Friday’s U.S. jobs report for May will determine the regulator’s move. The agency would avoid quick cuts if the U.S. labor market remained strong.
Even so, the market was pricing nearly a 100% chance the Fed will keep the rate unchanged at the 18th of June meeting.
But, for the July meeting, there was a 32% chance of a 0.25% rate cut to 4.00-4.25%. Simply put, a potential positive macro set-up in Q3 with no tariff war overhangs could juice up BTC and crypto markets.
If so, any BTC pullbacks could be great buying opportunities.
Source: CME FedWatch Tool
But before then, short-term pressure may prevail. In fact, Glassnode cautioned BTC’s daily realized profit surpassed $1B, a threshold that led to past local peaks.
“This marks the fifth wave in this cycle where daily profit-taking has surpassed the $1B threshold. Such events often coincide with local market tops or slowdowns, especially if incoming demand cannot absorb the scale of realized gains.”
Source: Glassnode
Overall, BTC appeared to have formed a new local peak at $111K for Q2. But there may be room for growth if the macro environment improves later in the year.
