Trump-Musk Twitter Feud Triggers $1 Billion Crypto Market Liquidation

TLDR

Bitcoin dropped below $101,000 and crypto liquidations hit nearly $1 billion following a public Twitter feud between President Trump and Elon Musk Ethereum led the decline with 7% losses, while Dogecoin fell 8% and other major altcoins dropped 4-6% Bybit exchange saw the largest liquidations at $354 million, with Bitcoin accounting for $342 million in liquidated positions The conflict started when Musk criticized a Congressional spending bill, prompting Trump to threaten cutting government contracts with Musk’s companies Spot Bitcoin ETFs recorded $278 million in outflows as institutional sentiment weakened

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A heated Twitter exchange between President Donald Trump and Tesla CEO Elon Musk sent shockwaves through cryptocurrency markets. The public dispute caused nearly $1 billion in leveraged positions to be liquidated across major exchanges.

Bitcoin fell below $101,000 during the market turmoil before recovering slightly. The drop marked a 4% decline for the world’s largest cryptocurrency. Ethereum led the broader market selloff with a 7% decline, touching $2,400 support levels.

Bitcoin (BTC) Price

The conflict began when Musk publicly criticized a Congressional spending bill that Trump supported. Musk called the legislation reckless and opposed the increased government spending it would authorize. His criticism drew sharp reactions from Republican lawmakers and the President.

Trump responded to Musk’s opposition by threatening to cut government subsidies and contracts for Musk’s companies. The President stated he would terminate agreements to save money in the current budget. Musk fired back by announcing SpaceX would begin decommissioning its Dragon spacecraft immediately.

The Elon Musk vs Donald Trump conflict has become a full on war. Trump is going to lose this one and it won't be particularly close. pic.twitter.com/TJxCRixYnY

— Unfiltered☢Boss (@Unfilteredboss1) June 5, 2025

Exchange Liquidations Hit Record Levels

Data from CoinGlass shows traders lost $988 million in liquidations within 24 hours. Long positions accounted for $888 million of the total, indicating widespread bullish bets were wiped out. Bybit exchange recorded the highest liquidations at $354 million.

Source: Coinglass

Bitcoin led individual token liquidations with $342 million in positions closed. Ethereum followed with $286 million in liquidated trades. Solana and Dogecoin saw $51 million and $27 million respectively in forced position closures.

Dogecoin experienced the steepest decline among major altcoins, falling 8% during the selloff. The meme cryptocurrency has strong ties to Musk through his previous social media support. XRP, Binance Coin, and Solana each dropped approximately 4% in the market rout.

Institutional Sentiment Weakens

Spot Bitcoin ETFs recorded $278 million in outflows as institutional investors pulled funds. The outflows reflected growing uncertainty about cryptocurrency markets following the political dispute. Bitcoin’s daily trading volume surged 35% to exceed $60 billion as volatility increased.

Ethereum futures open interest declined 5.5% as traders reduced their exposure. Long liquidations for ETH futures reached $260 million during the peak selling pressure. The cryptocurrency had been rejected at $2,700 resistance levels before falling to weekly lows.

Source: Coinglass

The market crash occurred ahead of Friday’s options expiry, which added to trader uncertainty. Many leveraged positions were caught off-guard by the sudden political developments. High-leverage bets on meme tokens like PEPE also contributed to the volatility.

The sell-off interrupted what had been a mostly bullish trend for cryptocurrency markets in recent weeks. Prior to the Trump-Musk dispute, crypto assets had been experiencing steady gains and increased institutional interest.

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