Matrixport Market Observation: BTC Breaks $110,000, Can the Market Uptrend Continue?

Last week (June 3 - June 10), BTC experienced a 10% pullback and $1.9 billion in derivatives liquidation before rebounding, briefly breaking through the $110,000 mark. On June 5, influenced by the conflict between Trump and Musk, market panic drove BTC close to $106,000, hitting a low of $100,372, barely holding above the $100,000 threshold. Subsequently, positive non-farm employment data boosted sentiment, and BTC rebounded to $110,530, with a maximum weekly increase of 10.12%, currently stabilizing around $109,450. Compared to BTC, ETH had a larger rebound, mainly driven by macroeconomic positives and capital inflow. Currently, the spot price of ETH is about $2,675 (Binance, June 10, 15:00).

Market Interpretation

BTC briefly breaks through $110,000, DeFi sector leads the market rally

Last week, BTC fell below $101,000 amid market panic triggered by the Trump-Musk conflict, with ETH also pulling back, and mainstream cryptocurrencies generally under pressure. Following the slightly better-than-expected non-farm data, risk appetite warmed up, leading BTC and ETH to lead the gains, with DeFi leaders like SOL, AAVE, UNI, and MKR all seeing weekly increases of over 13%. The total liquidation across the network reached $436 million, with long positions accounting for 87%, and the total crypto market cap rose to $3.56 trillion. The fear and greed index rose to 71, indicating a clear capital inflow and accelerated sector rotation.

The core driving forces for the rise are, firstly, the release of selling pressure and liquidity recovery after the liquidation of high-leverage funds, resulting in a healthier market structure; secondly, the SEC chairman's positive signals regarding DeFi exemption policies, with policy benefits combined with the recovery of investor sentiment. In the short term, attention will remain on this week's U.S. CPI and other macro data's impact on risk appetite.

U.S. non-farm data slightly exceeds expectations, market sentiment turns optimistic in the short term

In May, the U.S. non-farm payrolls increased by 139,000, the lowest in three months but higher than the market expectation of 126,000, with the unemployment rate holding steady at 4.2%. Following the data release, the three major U.S. stock indices rose collectively, while gold prices slightly retreated.

Recently, U.S. stock trading has continued to focus on expectations of an economic "soft landing" and changes in U.S.-China trade policies. Current employment and inflation data indicate a moderate economic slowdown, with stable unemployment rates, leading to a delay in market expectations for Federal Reserve rate cuts. Meanwhile, high-level U.S.-China discussions have resumed on the topic of "reciprocal tariffs," although there has been no substantial progress in negotiations, the market holds a cautiously optimistic view on policy easing.

Overall, the non-farm employment data slightly better than expected provides some support for U.S. stocks and the dollar, with risk appetite recovering in the short term, but geopolitical and policy uncertainties still exist.

Trump and Musk's public conflict impacts global markets

Last Thursday (June 5), Trump and Musk clashed over the "Beautiful America Act," which canceled electric vehicle tax credits and carbon credit policies, severely impacting Tesla's profitability. As a result, Tesla's stock price plummeted over 14% on June 6, with a market value evaporating by about $150 billion, and the three major U.S. stock indices also fell across the board, with the Dow, S&P 500, and Nasdaq dropping 0.25%, 0.53%, and 0.83%, respectively.

On the same day, the three major U.S. stock indices collectively declined, and the crypto market experienced significant volatility, with BTC dipping to a low of $100,372 and ETH falling over 7%. This round of market adjustment, in addition to the "Trump-Musk" incident itself, was compounded by profit-taking after previous gains, delays in expectations for Federal Reserve rate cuts, and seasonal liquidity issues.

ETH ETF capital inflow, financial innovation becomes the main theme

In the past 20 days, ETH ETFs saw a net inflow of $815 million, marking the first cumulative net inflow since the beginning of the year ($658 million), with a clear trend of capital inflow. ETH's rebound exceeded that of BTC, benefiting from the accelerated implementation of key applications such as stablecoins and asset tokenization. Payment giants like Visa, Mastercard, and Stripe are actively positioning themselves in ETH stablecoins, while crypto platforms like Coinbase and Robinhood are strengthening financial innovation scenarios, indicating a shift in ETH's market structure from speculation-driven to application-driven.

More Information

New South Korean president promotes stablecoin and ETF institutionalization, driving regional capital inflow

After Lee Jae-myung was elected as South Korea's president, the ruling party quickly proposed the "Digital Asset Basic Law," easing the threshold for local companies to issue stablecoins and promoting the legalization of virtual asset ETFs. The institutionalization process of South Korea's crypto market has accelerated, with market trading activity continuing to rise, and policy benefits driving capital back into local assets in won.

Total scale of crypto funds reaches new high, trend of diversified asset allocation strengthens

In May, the global crypto fund assets under management reached $167 billion, with a net inflow of $7.05 billion in a single month, accelerating the influx of funds into the crypto market. Data shows that BlackRock's spot BTC ETF (IBIT) surpassed $70 billion in assets within 341 trading days, holding 2.8% of the global BTC total supply.

In contrast, global equity funds saw a net outflow of $5.9 billion, and gold funds experienced their first net outflow in 15 months. Crypto assets are gradually becoming a regular allocation in investment portfolios, revealing structural changes in the market.

Crypto treasury model gains popularity, leverage and liquidation risks under scrutiny

Currently, over 120 listed companies have included BTC in their treasuries, with MicroStrategy holding 580,000 BTC, valued at over $61 billion. Analysts believe that if BTC falls below $90,000, about half of the holding companies will face the risk of losses, and passive selling could trigger a chain reaction of liquidations. The turning point of Grayscale's GBTC premium and related liquidation cases serve as a warning for the current crypto treasury model, with the industry needing to be vigilant against excessive leverage and liquidity risks.

Disclaimer: The above content does not constitute investment advice, sales offers, or purchase offers to residents of the Hong Kong Special Administrative Region, the United States, Singapore, or other countries or regions where such offers may be prohibited by law. Trading in digital assets may involve significant risks and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions made based on the information provided herein.