The crypto market crash continued on Friday as profit-taking accelerated and concerns about trade and the Federal Reserve deepened.
Bitcoin (BTC) price dropped to $105,500, down from the all-time high of $111,900 last week. The other top laggards were altcoins like PancakeSwap (CAKE), Raydium (RAY), Ethena (ENA), and Arbitrum (ARB), which dropped by over 10%.
The crypto market crash triggered a wave of liquidations. CoinGlass data shows that 24-hour liquidations jumped by 125% to $709 million. Almost 224,000 traders were liquidated, with the largest loss amounting to nearly $13 million.
Cryptocurrencies retreated as Bitcoin lost momentum following its strong rally that pushed it to its all-time high last week. It is common for Bitcoin’s price to pull back slightly after hitting a record high or a crucial milestone.
When Bitcoin sneezes, altcoins catch a cold. This explains why many altcoins have crashed even harder.
Second, Bitcoin and altcoins have declined in anticipation of June, which is typically the second-worst month for the crypto market after September. On average, Bitcoin returns -0.35% in June, as many investors take time off at the start of the summer season.
Third, there are lingering concerns about trade after a court ruled that Trump’s tariffs were illegal. Another court allowed these tariffs to continue as the administration appeals, a process that will take it to the Supreme Court.
Finally, there are signs that the Federal Reserve will hold interest rates steady at 4.50% for a while. Minutes released this week showed that officials are comfortable with a wait-and-see approach as they assess the impact of tariffs on inflation.
Is this crypto market crash the end of the bull run?
Technicals and fundamentals suggest that the crypto bull run has a long way to go. As crypto.news wrote here, the ongoing Bitcoin price action is part of the formation of the handle section of the cup and handle pattern. It is also forming a bullish flag pattern, which could result in a strong breakout and an altcoin market rally.
The other sign that the bull market is not over is Bitcoin’s supply and demand dynamics. Demand continues to rise, with ETFs bringing in over $45 billion in inflows and more companies adding it to their treasuries.
The supply on exchanges has dropped from 3.5 million in 2020 to 1.35 million. Therefore, this supply and demand dynamic suggests the coin will bounce back.