Why is crypto down today? Trump-Musk fallout rattles sentiment, Dogecoin drops 20%

The crypto market slid sharply on Friday, June 6, shedding 5% over the past 24 hours as rising political tensions between President Donald Trump and Elon Musk sent investor confidence tumbling. 

The total crypto market capitalization now stands at $3.29 trillion, down from around $4.1 trillion on June 5. According to data from Alternative, the Crypto Fear & Greed Index dropped 12 points, from 57 to 45, marking a move into “fear” territory. This decline in sentiment follows a public clash between Trump and Musk that has also weighed heavily on traditional markets.

Bitcoin (BTC) is down 3.1% and trading at $101,843 at press time. Ethereum (ETH) leads the top 10 altcoin losses with a 7.5% slide, while Solana (SOL), XRP (XRP), and BNB (BNB) each slid about 5%. Nearly $986 million in cryptocurrency positions were liquidated in the last day, according to Coinglass data, a 358% increase.

The crypto market relative strength index dropped to 32.7, indicating oversold conditions, and open interest dropped 2.71% to $140 billion.

The market reaction followed a series of political escalations. The fallout started when Musk resigned from the Department of Government Efficiency and publicly criticized the President’s recent spending bill, dubbed the Big Beautiful Bill.

In response, Trump revoked Jared Isaacman’s NASA nomination, a close associate of Musk, and threatened to completely cut off government contracts for businesses run by Musk.

The feud intensified on June 5 after Musk accused Trump of being connected to the Jeffrey Epstein files and supported calls for his impeachment. Trump, in turn, declared that Musk had “gone crazy.” As tensions rose, Tesla shares plunged more than 14%, and Musk announced SpaceX would begin decommissioning its Dragon spacecraft.

Dogecoin (DOGE) suffered the sharpest decline among major tokens, plummeting nearly 20% in the past 24 hours. While DOGE lacks intrinsic utility, its price has long been sensitive to Musk’s actions and statements. The token had rallied following Trump’s election win, amid hopes of crypto-friendly policies. However, investors seem to be pulling back as that optimism wanes. 

Alongside digital assets, cryptocurrency-related stocks also suffered. Mining companies MARA, Riot Platforms, and Core Scientific all saw losses of about 5%, while Coinbase fell 4.6% and Strategy fell 2.4%. 

Meanwhile, political uncertainty continues to attract the interest of the crypto community. Traders currently assign a 10% probability that Trump will be impeached before the end of 2025 on the decentralized prediction platform Polymarket. So far, almost half a million dollars has been wagered on that outcome.

Market volatility may persist in the coming days as macro risks increase and sentiment toward cryptocurrencies declines.