Navigating Bitcoin’s Recent Dip Amid Musk-Trump Tensions and Market Dynamics

Main Points:

• Musk-Trump Feud Sparks Market Uncertainty: Public clashes between Elon Musk and former President Donald Trump have injected volatility into crypto markets, influencing investor sentiment.
• Profit-Taking by Long-Term Holders: After May 22’s all-time high, seasoned holders have been offloading positions, contributing to short-term downwards pressure on BTC.
• Technical Support and Resistance Levels: Key price floors around $103,700 and $95,600 are being tested, while overhead resistance near $110,624–$111,800 looms as a barrier to new highs.
• Liquidations Drive Volatility: In the 24 hours surrounding June 5–6, 2025, nearly $982 million in total positions were liquidated, with over $891 million from long orders, exacerbating downward moves.
• Altcoin Market Mirrors Bitcoin’s Movement: Ethereum, XRP, and Solana all posted significant declines—7.25%, 4.35%, and 5.20% respectively—in step with BTC’s consolidation.
• Institutional Inflow Bolsters Underlying Demand: Despite volatility, corporate treasuries and institutional investors continue to accumulate, reflecting deeper interest from public companies and funds.
• On-Chain Metrics Reveal Growing Adoption: Glassnode data indicates rising wallet creation and accumulation zones above $90,000, signaling confidence among whales and retail alike.
• Predictions Point to Potential Rebound: Some analysts forecast a resumption of upward momentum if BTC holds support above $108,000–$110,000, suggesting a path toward $120,000 in the coming months.

1. Introduction: Market Context and Recent Price Action

Over the past week, Bitcoin (BTC) has experienced heightened volatility, with prices first surging to a new all-time high above $111,970 on May 22, 2025, before retracing sharply toward the $100,000 mark by early June 2025. In the past 24 hours alone, BTC has oscillated between $105,915 and $100,500, eventually stabilizing around $102,180 at the time of writing. This roughly 3% intraday drop came as long-term holders—those retaining BTC for at least 155 days—began selling into the rally to lock in profits. Peripheral to this profit-taking is a public feud between Elon Musk, CEO of Tesla and SpaceX, and former U.S. President Donald Trump, which has injected a layer of political uncertainty into markets. As Musk criticized Trump’s tariff proposals on social media platform X, Trump retaliated by threatening to cut billions in government subsidies and contracts to Musk’s companies. Musk even threatened to retire SpaceX’s Dragon spacecraft in response, only to retract his statement hours later. The combination of profit-taking by whales and a fraught public spat between two high-profile figures has unsettled investors, contributing to the recent pullback in BTC.

2. Musk-Trump Feud: Catalyzing Crypto Volatility

On June 5, 2025, Elon Musk tweeted on X that former President Trump’s proposed large-scale tariffs would induce a recession later in the year. Specifically, Musk warned that the elevated tariffs Trump advocated could choke economic activity, reducing risk appetite among market participants. In response, Trump posted on Truth Social that severing government contracts and subsidies to Musk’s companies—primarily SpaceX and Tesla—would yield “billions of dollars” in federal budget savings. Musk then declared via X that SpaceX would immediately begin retiring its Dragon spacecraft, the only American-made vessel capable of carrying astronauts to the International Space Station, though he retracted this statement merely hours later. While the Musk-Trump conflict may seem tangential to cryptocurrency, high-profile clashes of this nature tend to amplify uncertainty among retail and institutional investors alike. During turbulent macro moments, crypto markets often experience disproportionate reactionary moves, as digital assets are still viewed as somewhat speculative. In this case, Musk’s comments sowed doubt about U.S. economic policy direction, prompting risk-off positioning and contributing to BTC’s retreat toward $100,000, even as on-chain metrics suggested continued long-term accumulation.

3. Profit-Taking by Long-Term Holders and Market Dynamics

Glassnode, a leading on-chain analytics firm, has documented that Bitcoin’s new all-time high of $111,970 on May 22 marked a catalyst for seasoned holders to realize profits. According to Glassnode’s June 5 market note, profit realization by addresses that had held BTC for more than 155 days intensified in late May, coinciding with the absence of strong catalysts to push BTC convincingly above $111,800. As these long-term holders offloaded coins, BTC retraced from its peak down to the $100,000–$102,000 range. Glassnode’s “Cost Basis Quantiles” indicator now marks two critical support zones at $103,700 and $95,600—levels tied to historical cost bases for a majority of UTXOs (unspent transaction outputs). Should BTC fall below these zones, the probability of deeper short-term corrections increases significantly. To illustrate:

• Support at $103,700: Historically, this level represents a cluster where a large volume of BTC changed hands, now acting as potential buying pressure.
• Support at $95,600: A lower cushion formed by older cohorts who acquired BTC during prior accumulation phases.
• Resistance at $114,800: Imminent overhead congestion reflecting sellers from the $110,000–$115,000 distribution zones.

Though profit-taking has weighed on near-term momentum, it also refreshes supply at higher price points, potentially paving the way for more sustainable rallies in subsequent cycles.

4. Technical Analysis: Gauging Support and Resistance

Beyond on-chain cost basis analysis, traditional technical indicators corroborate a cautious market stance. As of June 6, 2025, Bitcoin’s Relative Strength Index (RSI) on the four-hour chart hovered around 68—just below the overbought threshold—suggesting that while bullish momentum persisted, a pullback was plausible. Binance data indicates that the 50-day moving average (MA) at $67,200 had previously underpinned BTC during intraday dips; however, with prices oscillating above $100,000, the MA’s relevance diminishes at present price levels. Instead, traders are monitoring:

• Immediate Support: $103,700 (on-chain cost basis), then $95,600 (lower cost basis).
• Immediate Resistance: $110,624 (spot resistance tested repeatedly between May 28 and June 3) and $111,800 (all-time high region).
• Volume Indicators: Trading volume on Coinbase for BTC/USD hit $18.7 billion in the 24 hours ending June 6, up 40% from the prior day—indicating significant interest despite price wobble.

Meanwhile, Bitcoin futures open interest on the CME climbed by 15% as of June 6, suggesting that institutional participants are ramping up positions, which can both stabilize and amplify future price moves. A sustained bounce from $103,700 with volume above $20 billion per day could signal renewed conviction, whereas a breakdown below $95,600 could catalyze a deeper correction toward $90,000–$92,000.

5. Liquidations and Volatility: The 24-Hour Snapshot

Data from CoinGlass (formerly Coinglass) indicates that in the 24 hours preceding June 6, roughly $982.55 million in cryptocurrency positions were liquidated, with a staggering $891.63 million of that total coming from long orders. These liquidations occurred primarily as leveraged traders positioned for further upside found themselves underwater when BTC dipped below key stop-loss levels. As leveraged liquidations cascade, they often feed into additional selling pressure, forming a self-reinforcing loop during rapid price swings. During the high point when BTC briefly spiked to $105,915, many traders entered long positions at $102,000–$104,000; when prices fell back to $100,500, stop-loss triggers were hit, converting liquidations into downward momentum. In aggregate:

• Total Liquidations: $982.55 million (24h from June 5–6)
• Long Liquidations: $891.63 million (approximately 90.7% of total)
• Short Liquidations: $90.92 million

This disproportionate long-liquidation figure underscores how crowded bullish positioning had become, setting the stage for sharper retracements in the absence of fresh buying catalysts.

6. Altcoins Follow Bitcoin’s Lead: ETH, XRP, SOL Performance

The recent slump in BTC has not been isolated; major altcoins have likewise retraced. On June 5:

• Ethereum (ETH): Declined 7.25%, dropping from $3,150 to around $2,920 amid broad risk-off tendencies.
• XRP: Fell 4.35%, moving from $2.10 to near $2.01 as liquidity rotated out of mid-cap tokens.
• Solana (SOL): Decreased 5.20%, evidencing pain across layer-one smart contract platforms when BTC stress intensifies.

These declines reflect a broader “beta correlation” phenomenon, where altcoins amplify Bitcoin’s directional moves during corrections. In aggregate, over $891 million of long positions in altcoins were liquidated within the same 24-hour window, according to CoinGlass. Given that ETH’s derivatives open interest sits above $14 billion, substantial liquidation cascades in ETH futures and perpetual swaps contributed to sharper price slides amid leveraged selling.

7. Institutional Inflows and On-Chain Metrics: The Underlying Bull Case

While short-term volatility may discourage some participants, deeper on-chain and institutional trends reveal a persistent accumulation trajectory. Glassnode’s latest “Gaining Ground” report (Week 18, 2025) noted that as of early May, BTC saw a price rebound from $74,000 to $97,900, with over 3 million BTC returning “in the money” as unrealized losses shrank. Although prices pulled back to around $94,000 before rallying to $97,000, net realized cap climbed to $889 billion, signaling renewed market strength at lower price regions. Meanwhile, corporate treasuries continue to purchase:

• MicroStrategy (MSTR): Accumulated roughly 580,250 BTC, acting as a bellwether for corporate allocation.
• Galaxy Digital (GLXY.TO): Holds about 12,830 BTC.
• DD (MetaPlanet, 3350.T): Owns approximately 7,800 BTC.
• Block, Inc. (SQ): Maintains a reserve of 8,584 BTC.
• GameStop Corp. (GME): Holds 4,710 BTC, reflecting even retail-facing companies’ foray into BTC.

In total, these entities collectively account for over 640,000 BTC—roughly 3.2% of circulating supply—purchased at prices above $90,000. Santiment data shows that on May 29, 2025, a record 556,830 new BTC wallets were created, the highest tally since December 2023. By June 2, circulation spiked to 241,360 BTC moved on-chain—the most since December 2024—underscoring robust network activity and strong demand at current levels. Glassnode’s URPD (Unspent Realized Profit/Loss Distribution) further illustrates that wallets holding between 100 and 10,000 BTC are clustering around $90,000–$105,000, denoting confidence among whale cohorts. Although short-term sentiment turned cautious in early June, these long-term accumulation trends remain firmly bullish.

8. Market Sentiment and Predictions: Eyes on $120,000

Amid the current consolidation, analysts are divided on whether BTC will resume its trajectory higher or undergo a more prolonged correction. CCN.com’s “Biggest Crypto Predictions for June 2025” suggests that if whales continue to accumulate—and BTC holds above $108,000—there is a plausible path to $120,000 by late summer. Their analysts point to continued institutional inflows into spot ETFs and corporate buys as key drivers. Meanwhile, XRP is forecast to test $1.94 on bearish momentum unless renewed adoption flips demand dynamics.

On the flip side, TradingView’s June 5 analysis emphasizes that BTC’s “ATH fatigue” has set in: as market data indicates exhaustion from earlier buyers, immediate support near $103,700 (on-chain cost basis) and $95,600 (lower cohorts) may be tested before any sustained rebound. If BTC fails to maintain $103,700, a deeper pullback toward $92,000–$95,000 becomes increasingly likely, correlating with prior accumulation zones. Traders are advised to monitor on-chain metrics, CME futures open interest, and volume spikes, as these will signal whether capitulation gives way to fresh buying interest or further downside.

9. Broader Crypto Ecosystem: Navigating Opportunities

For readers seeking new crypto assets, income streams, and practical blockchain applications, the current environment presents both challenges and opportunities:

1. Layer-One Smart Contract Platforms (L1s):
   • Although SOL fell 5.20%, on-chain activity on Solana remains strong—daily active addresses surged to 1.5 million on June 4, 2025, buoyed by DeFi and NFT volumes. Moreover, Ethereum’s upcoming Shanghai 2.0 upgrade, scheduled for July 2025, promises to unlock staked ETH, potentially catalyzing fresh demand. DeFi yields on Ethereum remain among the highest, averaging 6–8% APY for stablecoin pools, while Solana-based lending platforms offer up to 10% APY, making L1 participation attractive despite temporary price dips.
2. Staking and Yield-Generating Protocols:
   • With Ethereum 2.0 deposits nearing 20 million ETH, staking yields hover around 4% APR. Users can explore liquid staking derivatives (LSDs) such as Lido (stETH) or Rocket Pool (rETH), which allow continued capital efficiency while earning rewards. On Cosmos and Polkadot ecosystems, staking returns range from 8% to 12%, presenting diversified options for yield-seeking participants.
3. Decentralized Finance (DeFi) Opportunities:
   • DeFi protocols on Avalanche (AVAX) and Terra Classic (LUNC) offer arbitrage opportunities between lending rates and LP incentives. As volatility increases, liquidity mining events—such as Aave’s upcoming v4 incentive round in Q3 2025—could yield significant APR boosts for early participants. However, risk management is paramount; users should diversify across protocols and monitor smart contract audits to mitigate hack exposures.
4. Non-Fungible Tokens (NFTs) and Web3 Gaming:
   • Despite macro uncertainty, visual art and gaming NFTs on Solana and Polygon continue to trade robustly, with monthly sales volumes exceeding $2 billion. Upcoming metaverse land sales on platforms like The Sandbox (SAND) and Decentraland (MANA) are poised to benefit from seasonal growth ahead of the holiday quarter. Investors can stake MANA to earn governance rewards, while liquidity pools on Quickswap (Polygon) offer 15–20% APR for dual-token LPs, albeit with impermanent loss considerations.
5. Institutional Crypto Products:
   • The U.S. currently hosts over $50 billion in net inflows to Bitcoin ETFs year-to-date, with several new spot and futures-based ETH ETFs expected by August 2025. Institutions are also eyeing regulated custody solutions—Fidelity Digital Assets, Binance Custody, and Coinbase Custody collectively hold over $15 billion in BTC and ETH as of June 2025, according to CoinDesk. For corporates seeking balance sheet diversification, the “Bitcoin CleanEnergy” certification—indicating mining uses at least 50% renewable energy—could become a decisive factor, reflecting ESG pressures.
6. Regulatory Landscape and Compliance:
   • In the Philippines and Japan, central banks and financial regulators are rolling out guidelines for VASPs and EMIs. As of May 2025, the Bangko Sentral ng Pilipinas (BSP) has issued Circular 1185 clarifying licensing requirements for crypto service providers, while Japan’s Financial Services Agency (FSA) expanded its Virtual Currency Exchange licensing to include cross-chain decentralized exchange (DEX) operators. Such regulatory clarity lowers barriers to entry for new projects and assures prudence for investors concerned about compliance.

By mapping these opportunities against one’s risk appetite, investors and developers alike can identify new crypto assets, yield sources, and blockchain implementations that align with both short-term market cycles and long-term ecosystem growth.

10. Predictions and Potential Scenarios

Looking forward to mid–late 2025, several potential scenarios could unfold for Bitcoin and broader crypto markets:

1. Bullish Scenario (BTC Cleanses and Rebounds):
   • Should BTC hold above $103,700 through mid-June, a renewed Bitcoin rally toward $114,800–$120,000 is plausible. This trajectory hinges on sustained institutional inflows into GBTC and newly approved ETH spot ETFs, combined with corporate treasuries continuing to add to positions. In this scenario, macro risk-on sentiment—driven by U.S. equities and a dovish Fed stance—further supports price appreciation. Inflows of $120 million per day into ETFs, as seen on June 5, reinforce bullish momentum.
2. Neutral Scenario (Extended Range-Bound Trading):
   • Bitcoin could continue to trade sideways between $95,000 and $110,000 for several months, reflecting a period of consolidation. In this case, on-chain metrics—wallet creation, realized cap, and URPD data—may continue to show accumulation without substantial price breakout. DeFi yields and NFT activity remain active, but no single catalyst emerges to drive BTC above its late-May highs until late Q3 2025. Glassnode’s “Boring 2025” thesis suggests that slower cyclic growth may underlie structural maturation, with measured volatility rather than parabolic moves.
3. Bearish Scenario (Breakdown Below $95,600):
   • If Musk-Trump tensions escalate into broader economic policy uncertainty—such as sudden interest rate hikes or trade wars—risk-off flows could cascade, pushing BTC below the $95,600 support. In this scenario, technical support near $90,000–$92,000 would be tested, potentially rekindling fear among weak hands. A drop below $90,000 could trigger widespread deleveraging in futures markets, leading to increased liquidations and a full retest of $80,000 by Q3 2025. While on-chain accumulation by institutions may cushion further downside, retail sentiment could sour, delaying any meaningful rebound until macro stability returns.

11. Practical Considerations for Blockchain Use Cases

For readers interested in real-world blockchain applications beyond pure trading, the current market environment remains fertile for development and adoption:

1. Enterprise Blockchain Solutions:
   • Supply chain traceability remains a key use case. IBM’s Food Trust and VeChain’s ToolChain have onboarded dozens of major retailers and manufacturers to track provenance using permissioned ledgers. In 2025, expect expanded integration of RFID and IoT sensor data into public blockchains like Polkadot and Avalanche for cross-border logistics.
2. Decentralized Identity (DID) and Self-Sovereign Identity (SSI):
   • The decentralized identity market is projected to grow by 200% year-over-year, with W3C standards maturing. Projects such as Sovrin and Hyperledger Indy are piloting SSI-based credentialing for universities and government agencies in Asia, including pilot programs for digital driver’s licenses and healthcare records.
3. Tokenization of Real-World Assets (RWA):
   • Real estate syndication platforms are tokenizing property ownership in Japan and the Philippines, issuing ERC-1400-compliant security tokens that represent fractional shares in rental complexes. These RWA tokens enable liquidity formerly absent in physical assets, allowing investors to trade shares on regulated DEXs during extended trading windows.
4. Decentralized Finance Integration with TradFi:
   • Major banks in Japan are conducting proofs-of-concept for integrating DeFi lending pools with on-chain collateral management. Mitsubishi UFJ Financial Group (MUFG) is partnering with Aave to pilot cross-chain credit facilities, using tokenized corporate bonds as collateral. In Southeast Asia, remittance corridors powered by stablecoin rails (e.g., TrueUSD) are reducing transfer fees by 70% compared to traditional SWIFT routes.
5. Green Mining and ESG-Compliant Crypto:
   • As energy consumption concerns mount, Bitcoin mining firms are relocating to regions with abundant renewable resources—particularly hydropower in Scandinavia and geothermal in Iceland. ESG frameworks for “Green BTC” issuance are emerging, with public companies only purchasing freshly minted BTC from miners certified to use ≥75% renewables.

By exploring these applications, developers and corporate stakeholders can harness blockchain’s potential beyond mere price speculation, building solutions that optimize supply chains, enhance digital identity systems, and unlock liquidity in traditionally illiquid asset classes.

12. Conclusion: Synthesizing Recent Dip with Long-Term Trajectory

Bitcoin’s recent dip toward $100,000 should be viewed through a multifaceted lens. While the profit-taking by long-term holders and liquidations of leveraged positions have triggered short-term volatility, underlying fundamentals—such as institutional adoption, on-chain accumulation, and network activity—continue to strengthen. The feud between Elon Musk and Donald Trump added an unpredictable political variable, temporarily rattling risk appetite across asset classes. Yet, corporate treasuries and institutional investors persist in building positions, buoyed by favorable macro correlations and the nascent integration of legacy finance with crypto products.

From a technical standpoint, BTC sits at a critical juncture: holding $103,700–$95,600 could set the stage for a renewed rally toward $110,624–$120,000, while a breakdown below $95,600 risks a deeper correction. For crypto enthusiasts scouting new digital assets and practical blockchain solutions, the current market offers numerous entry points—be it staking ETH, providing liquidity on emerging DeFi protocols, or building enterprise-grade blockchain applications. Moreover, regulatory clarity in regions like the Philippines and Japan lowers barriers for VASPs and tokenization platforms, further legitimizing the ecosystem.

Ultimately, while short-term headwinds may prompt caution, the broader trajectory for Bitcoin and blockchain technology remains upward. Investors and practitioners should balance near-term risk management—monitoring liquidation metrics, on-chain signals, and macro news—against long-term themes of institutional adoption, regulatory maturation, and real-world application. By maintaining a diversified approach and staying attuned to both on-chain analytics and off-chain developments, participants can navigate the current dip, positioning themselves for the next phase of growth in digital assets.