The cryptocurrency market has staged a dramatic V-shaped recovery.
From late yesterday to early this morning, Bitcoin (BTC) surged from $108,000** to reclaim **$110,000, peaking at $110,400**—just **$2,000 shy of its all-time high. Ethereum (ETH) outperformed even more remarkably, breaking past $2,800 to reach a 15-week high. Altcoins also gained momentum, reflecting improved market sentiment.
Just a week ago, Elon Musk and Donald Trump’s high-profile feud sent crypto prices tumbling, with BTC nearly dipping below $100,000. Yet, within days, the market rebounded sharply. What triggered this reversal? And with BTC nearing its previous peak and ETH rallying hard, could another bull run be imminent?
The Trump-Musk Feud: A $153 Billion Market Shock
On June 5, BTC was testing $106,000**, while ETH lingered below **$2,800. Hours later, prices collapsed:
- BTC plunged to $100,372**, barely holding **$100K support.
- ETH dropped to $2,381.
- $983M** in liquidations occurred within 24 hours, with **$892M from long positions.
The catalyst? A heated dispute over the "Big Beautiful" Act—a Trump-backed bill slashing clean energy subsidies, which would cost Tesla $8.7B annually. Musk blasted Trump on Twitter, triggering a public spat:
- Trump threatened to cancel Musk’s $2B/year government contracts.
- Musk retaliated by alleging Trump’s ties to the Epstein scandal.
- Tesla’s stock crashed 14% ($153B wiped out), while DOGE (-6.4%) and TRUMP (-10%) tanked.
The fallout eased after Musk deleted his posts, and Trump later wished Musk "all the best." The reconciliation stabilized markets, but bigger forces were at play.
Key Drivers of the Crypto Rally
U.S.-China Trade Talks
- Progress in London negotiations hinted at eased稀土 (rare earth) export restrictions.
- S&P 500 and Nasdaq rallied for 3 consecutive days, lifting crypto.
Corporate Bitcoin Adoption
- 124 public companies now hold 816K BTC (~$85B), up from 89 in April.
Circle’s Explosive IPO
- Shares surged 241.64% in 5 days after listing at $31**, peaking at **$138.57.
Altcoin ETF Momentum
- SEC requested revised filings for Solana ETF, with analysts predicting 90%+ approval odds for SOL and LTC.
Will the Bull Run Continue?
Macro Factors
- Fed Rate Cuts: Traders now expect just one 2024 cut (down from six earlier).
- Inflation: May CPI rose to 2.4% YoY, reinforcing Fed’s cautious stance.
- Recession Fears Fade: Only 30% of CEOs predict a 2024 recession (vs. 62% in April).
Crypto-Specific Trends
- BTC ETF Flows Slowing: Inflows lag behind November 2023 and April 2024 levels.
- ETH Strength: Derivatives volume ($110B) surpassed BTC ($847.2B). Analysts see $5.5K–$6.7K ETH if staking ETFs approve.
Market Predictions: Diverging Views
Bulls
- Matrixport: BTC’s breakout above $105,075 signals continued upside.
- Bitwise: BTC could hit $200K by 2024-end, citing U.S. debt and fiscal policies.
Bears
- Chain Analysts: Current rally lacks fundamentals; BTC may struggle to set new highs without Nasdaq support.
FAQ
Q: Why did BTC rebound so quickly after the Trump-Musk feud?
A: Market stabilization followed their reconciliation, but U.S.-China trade progress and corporate BTC buys were bigger catalysts.
Q: Is ETH a better bet than BTC now?
A: ETH’s ETF potential and staking narrative have analysts bullish, with targets up to $6.7K.
Q: When’s the next Fed rate cut expected?
A: Markets price in one cut by December, but hot CPI data could delay it further.
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Bottom Line: While BTC and ETH ride macro tailwinds, liquidity constraints and Fed policies remain hurdles. Watch CPI data and ETF approvals for the next big move.