How Low Could Bitcoin Price Go in This Crypto Market Crash?

The recent turbulence in the cryptocurrency market intensified overnight, marked by a significant downturn in Bitcoin’s valuation. Bitcoin’s price plummeted by 5.2%, reaching a low of $100,345. This sharp decline was attributed to a combination of factors, including forced liquidations of leveraged trading, geopolitical tensions, and a public dispute between major influencers Elon Musk and Donald Trump.

In this article, we will explore the key factors behind this overnight crash and assess whether this could signal the end of Bitcoin’s bullish momentum.

Aggregated Reasons For Yesterday’s Bitcoin Price Decline

The primary driver of yesterday’s price decline was an executive order signed by Donald Trump, which has triggered volatility across various financial markets, including cryptocurrencies. This recent EO has raised tariffs on steel and aluminum by 50%, aiming to bolster domestic manufacturing. Such measures understandably influence market sentiment, particularly among investors in Bitcoin and other cryptocurrencies.

Furthermore, tensions between the United States and China have reignited, with no resolution in sight, further contributing to a bearish outlook across the market. This uncertainty has repercussions not only for cryptocurrencies but also delays on major technological advancements, which exacerbate pessimism.

The negative market sentiment resulted in massive liquidations, affecting over 215,593 traders within 24 hours, totaling nearly $967.63 million in liquidated positions, according to Coinglass data. A notable incident involved the highest liquidation order on Bitmex, valued at $10 million.

Meanwhile, prominent trader James Wynn faced significant losses as his long positions worth $16.14 million were liquidated. Reports indicate that Wynn had to exit all ongoing long positions as a result.

In addition to these developments, the ongoing feud between Trump and Musk is also playing a role in the market decline. The discord arises from Musk’s advocacy for ending electric vehicle subsidies, which he feels would benefit the economy if reallocated to different areas.

These combined factors have put considerable pressure on the cryptocurrency market, as both Trump and Musk are influential figures within the crypto advocacy space. Their disagreement could sway investor sentiment further.

Should We Be Concerned About Bitcoin Price?

After the turbulent night leading to this drastic decline, Bitcoin’s price showed some signs of recovery on June 6th, rising by 3% to $103,976. Interestingly, recent patterns reveal a significant uptick in short liquidations compared to long positions.

This renewed optimism corresponds with reports that essential trade discussions between the U.S. and China are set to resume, mitigating some bearish pressures and helping Bitcoin maintain its support levels from the previous month.

Market sentiments seem to indicate that the recent downward move was heavily influenced by liquidity and stop-loss hunting, possibly pointing to an impending upward shift in Bitcoin’s price trajectory.

Going forward, if market conditions deteriorate, we may witness Bitcoin’s price drop to around $92,917 by the end of June. Conversely, if trends shift positively, the $130,000 mark could be within reach by month-end.