Key Points:
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On June 6th, the cumulative valuation of the cryptocurrency market experienced a dip of 2.30%, settling at $3.21 trillion, potentially influenced by the reported dispute between Trump and Musk.
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Crypto futures contracts worth over $980 million were closed out, with the majority ($874 million) being long positions, highlighting the strong selling trend.
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After falling below a descending parallel channel, the overall crypto market capitalization might face further declines towards the $2.9 trillion mark.
The collective worth of all cryptocurrencies witnessed a decline of roughly 2.30% within the last day, settling at $3.21 trillion on June 6th.
Here’s a deeper look at the factors contributing to the current downturn in the cryptocurrency market.
Trump-Musk Dispute Impacts Cryptocurrency Market
Cryptocurrency values began to decrease in the late hours of New York trading on June 5th, following a publicly reported disagreement between former US President Donald Trump and entrepreneur Elon Musk.
The two prominent figures, who had previously shown support for each other during the 2024 US Presidential election cycle, reportedly engaged in online exchanges characterized by intense dialogue, leading to a reduction in investor risk appetite.
Musk criticized Trump’s recent spending plan, labeled the Big Beautiful Bill, and endorsed calls for his removal from office.
Trump responded with firm statements concerning the economy, suggesting that ending governmental support and agreements with Musk’s entities would lead to considerable savings for the United States.
Consequently, Bitcoin 
BTCUSD saw a reduction of around 5.2%, bottoming at $100,400 on the Bistamp exchange, before recovering to trade above $103,200. The BTC decline triggered broad selling by crypto investors, contributing to lower prices.
Ether (ETH) decreased to $2,384 on June 6th, indicating a 4% reduction over the past day. XRP (XRP) and Solana (SOL) also registered notable decreases, dropping by 4% and 5.2% respectively.
Dogecoin (DOGE), a memecoin commonly linked to Elon Musk, was significantly affected by the selling, dropping 9% in value over the last 24 hours.
Crypto Market Faces $980M in Liquidations
The recent downturn in the cryptocurrency market aligns with a substantial number of liquidations in the futures market, reaching $979.9 million within the past 24 hours.
Notably, long positions in the futures market experienced liquidations valued at $874 million, marking the highest single-day liquidation figure since February 25th. In contrast, short traders faced considerably smaller liquidations of $105 million.
Bitcoin and Ether led the liquidation charts with figures of $342.9 million and $285 million, respectively. Solana followed with $50.3 million, while Dogecoin and XRP recorded $27 million and $23 million in liquidations, correspondingly.
These extensive liquidations can intensify price decreases and generate apprehension amongst market participants, potentially leading to increased selling pressures.
Analysts are currently focused on identifying crucial support levels for leading cryptocurrencies, with CryptoQuant’s Axel Adler Junior indicating that Bitcoin’s immediate support resides around the short-term holder (STH) realized price of approximately $97,500.
Following the contentious interactions between Elon and Donald, the Bitcoin futures segment experienced $324 million in liquidated long positions. Key support is situated near the STH Realized Price at $97,500. pic.twitter.com/hJK7ZtgVgu
Technical Analysis of the Crypto Market’s Downturn
From a technical viewpoint, the cryptocurrency market’s present decline occurs subsequent to breaching a multi-week support around the $3.25 trillion valuation.
The adjacent chart illustrates the market retesting critical support at around $3.12 trillion, where both the 50-day and 200-day simple moving averages (SMAs) converge. Note that the last instance when TOTAL — representing the cumulative market capitalization of all cryptocurrencies — fell below this juncture was on February 24th, triggering a 26% price reduction.
The relative strength index (RSI) has declined from overbought levels at 79 on May 10th to 45, suggesting growing downward pressure.
Should TOTAL fall below $3.12 trillion, the market may be at risk of further descent towards the 100-day SMA at $2.9 trillion in the near term.
This document should not be regarded as offering investment advice or making recommendations. Any investment or trading activities involve intrinsic risks, and it is imperative that readers conduct independent research before making any decisions.
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