The crypto market has pulled back to a key point.

Image:https://www.gate.com/trade/BTC_USDT

As of noon on June 6, the price of Bitcoin (BTC) fell by 0.7%, reaching a low of $100,400. Ethereum (ETH) dropped to around $2,450. The downtrend in the crypto market has become apparent this week. Although some technical indicators still show that the support area is solid, the battle between bulls and bears is becoming increasingly fierce, and the market has entered a typical “crossroads.”

Public Opinion Conflict: Musk’s Remarks Ignite Market Sentiment

On June 6, Musk rarely publicly criticized the Trump team’s exploitation of the crypto market on X (formerly Twitter), suggesting that certain policies were “illogical.” This statement immediately shook the market, causing investors to worry about the uncertainty that political maneuvering could bring to the market regulatory environment.

Previously, Trump had frequently shown goodwill towards the encryption industry, including accepting donations in cryptocurrency and promising to ease industry regulations. However, Musk’s “disruption” caused a sudden change in market sentiment, leading to the belief that the related political support might not be stable, which in turn triggered short-term selling pressure.

The Federal Reserve (FED) interest rate hike expectations fluctuate, increasing macroeconomic uncertainty.

Although the market generally expects The Federal Reserve (FED) to cut interest rates within the year, the recently released employment data showed weakness, and Trump’s renewed calls for a rate cut have instead made investors wary of the risk of rising inflation. On one hand, cutting interest rates theoretically benefits risk assets, including encryption; on the other hand, uncontrollable inflation could trigger stricter monetary policy.

This has led the market into a contradictory mindset of “hoping for interest rate cuts - worrying about stagflation,” causing investors to prefer taking profits at high levels and waiting to see the performance of subsequent macro data.

The volatility of BTC has decreased, and the heat of the market is on the decline.

According to data from derive.xyz, the 180-day historical volatility of BTC has decreased from 56% two months ago to 46%. Although it seems that the risk has decreased, this also indicates a weakening enthusiasm for capital participation, and the market lacks a clear direction.

In addition, the Derive platform data shows that currently over 57% of BTC contracts are put options, indicating that the market expects further downside in the short term. This data reinforces the bearish sentiment and further explains the overall decline in the market today.

Although ETF inflows have warmed up, short-term momentum is still insufficient.

From a funding perspective, the U.S. spot BTC ETF has recorded net inflows for two consecutive days, with nearly $280 million added on June 4 alone. However, this positive news has not significantly boosted the market, indicating that current funds are more from medium to long-term allocations, while short-term traders remain in a defensive stance.

On the Ethereum side, the ETF has recorded net inflows for 13 consecutive days, performing significantly better than Bitcoin. However, due to the overall cautious market sentiment, its upward potential remains constrained.

Fear and Greed Index: Emotion Plummets

The latest “Fear and Greed Index” has rapidly fallen from a historical high of 76 to a neutral to fearful zone. This indicator reflects that investor sentiment is shifting from greed to caution, especially during a stage where macro policy directions are still unclear, and waiting has become the mainstream choice.

Conclusion: The fall may be a healthy adjustment, but be wary of bearish signals.

In summary, the reason for “why the crypto market is falling today” is not a single event, but the result of multiple factors overlapping - including the public opinion conflict between Musk and Trump, the fluctuating expectations of The Federal Reserve (FED) policies, and the cooling of market sentiment.

Although there are currently no obvious signs of a crash, the market is in a critical support zone. If there is a lack of positive stimuli or further deterioration in the macroeconomic situation, the possibility of entering a medium-term downtrend cannot be ruled out. For investors, controlling positions and paying attention to policy trends will be the core strategy in the near term.