Bitcoin has experienced a sharp pullback as the crypto market reacted to rising political tensions between Elon Musk and U.S. President Donald Trump. The unexpected clash began when Musk openly criticized the administration’s proposed “Big Beautiful Bill” on X, calling it damaging to innovation and digital freedom. In response, Trump fired back with comments that fueled speculation and uncertainty across financial markets. This sudden confrontation between two of the most influential voices in finance and tech quickly spilled into the crypto space.
Within hours of the exchange, Bitcoin dropped over 5%, breaking below short-term support levels and sparking volatility across major altcoins. According to CryptoQuant data, the futures market reacted violently, with over $324 million in long positions liquidated in a single session, marking one of the largest liquidation events in 2025. Traders were caught off guard as directional sentiment flipped rapidly, reflecting growing unease.
Bitcoin stands at a pivotal moment as it hovers below its all-time high of $112,000. The broader market is watching closely, anticipating either a breakout into price discovery or a deeper retracement if momentum fades. Bulls maintain control above the $100,000 level, but the recent surge in volatility has highlighted growing risks. Macroeconomic headwinds—particularly rising US Treasury yields and global uncertainty—have kept markets on edge. Now, political friction is adding fuel to the fire.
If Bitcoin fails to reclaim momentum above the $110K region, traders may begin eyeing downside targets. Adler points to $97,500 as the nearest support level, aligning with the Short-Term Holder (STH) Realized Price. A drop below that level could accelerate the decline and shift momentum in favor of bears. However, if BTC holds its current ground and sentiment recovers, the foundations remain intact for a strong continuation into new highs.
Bitcoin is showing resilience after a sharp retrace from the $112K all-time high, bouncing off the $103,600 support level, marked by strong historical relevance and alignment with the 34-day EMA. As seen in the chart, BTC tapped this zone with a low of $101,159 before quickly reclaiming higher ground, currently trading near $103,743.
The bounce has formed a potential higher low within the broader uptrend, signaling that bulls are not yet giving up control. However, the failed breakout above $109,300 highlights resistance pressure, and BTC needs to decisively flip that level into support to confirm a bullish continuation.
Volume on the latest candle suggests buyers are stepping in, but the lack of a strong surge indicates market caution. The 50-day SMA (green) remains upward sloping, offering medium-term support, while the 100-day and 200-day SMAs are still trending below, reinforcing the bullish bias unless the price drops below $100K.
For now, $103,600 is the level to watch. A breakdown below that could open the door to further declines toward the $98K-$100K range. A sustained push above $106K, on the other hand, would likely invite bullish momentum and retest the $109K barrier.
Featured image from Dall-E, chart from TradingView
