Bitcoin Whale Wiped Out $100M — Is More Pain Coming?

Musk, Trump, and the Market Trap: Is Bitcoin Being Played?

Bitcoin (BTC) rebounded to $104,936 on June 6, following a steep decline to $100,430—its lowest level in four weeks—on June 5. Analysts attributed the crash to a mix of excessive leveraged positions, a possible bull trap, and broader macroeconomic concerns.

Leverage Liquidations and the Bull Trap Setup

According to crypto analyst SuperBitcoinBro, the sudden drop was triggered by overleveraged long positions from retail traders, compounded by the liquidation of a major wallet known as the Hyperliquid whale, or “James Wynn,” who reportedly lost over $100 million in a week. This chain of events created a textbook bull trap, catching optimistic traders off-guard and fueling additional downside pressure.

While a public clash between Elon Musk and Donald Trump generated headlines, analysts remain skeptical of any direct link between the feud and Bitcoin’s decline. Broader market moves were relatively muted, with the S&P 500 closing down just 0.55% on June 5.

Recession Fears and Custody Transparency Issues

Investor sentiment remains fragile amid growing fears of a global economic slowdown. U.S. unemployment claims recently hit an eight-month high, reinforcing caution among risk asset traders. Additionally, Fed Governor Adriana Kugler warned that tariffs could pose downside risks to employment and output growth.

Meanwhile, concerns surrounding Bitcoin custody practices resurfaced after Michael Saylor’s firm, Strategy, declined to share their on-chain wallet addresses. This fueled speculation about potential re-hypothecation—the reuse of Bitcoin collateral across multiple positions—despite no confirmed misconduct from custodians like Coinbase Custody or Fidelity Digital Assets.

Despite continued institutional inflows from entities like GameStop, Metaplanet, and Semler Scientific, Bitcoin remains below the $110K resistance. Traders are closely watching for clarity on the U.S. Strategic Bitcoin Reserves, which have seen no significant updates since their announcement three months ago.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.