Why Is Bitcoin Going Down? Elon Musk News Didn’t Help BTC Price, Analysts Predict Drop to $97K

Bitcoin (BTC) price action has entered a critical juncture as June 2025 unfolds, with the world's largest cryptocurrency trading on Monday, 2 June, 2025, around $104,823 after retreating from recent highs near $112,000. The current market dynamics present both opportunities and risks for retail traders, as technical patterns suggest potential volatility ahead while institutional sentiment remains cautiously optimistic.

Moreover, Elon Musk's latest venture into cryptocurrency-adjacent technology has once again captured market attention, though this time with less fanfare than his previous Bitcoin-related announcements

Elon Musk Bitcoin News: XChat Launch Fails to Impress Markets

In the latest Elon Musk development affecting crypto markets, the tech billionaire announced the launch of XChat, a new messaging app featuring what he calls "Bitcoin-style encryption." However, this Bitcoin news has failed to generate positive market momentum, with experts questioning the technical claims behind the offering.

All new XChat is rolling out with encryption, vanishing messages and the ability to send any kind of file. Also, audio/video calling.

This is built on Rust with (Bitcoin style) encryption, whole new architecture.

— Elon Musk (@elonmusk) June 1, 2025

“All new XChat is rolling out with encryption, vanishing messages and the ability to send any kind of file. Also, audio/video calling,” said Musk.

Elon Musk's XChat announcement has drawn criticism from cybersecurity professionals who point out that Bitcoin primarily uses digital signatures rather than encryption. Ian Miers, Assistant Professor of Computer Science at the University of Maryland, noted that "Bitcoin primarily uses signatures, not encryption," highlighting the confusion in Musk's marketing approach.

Needless to say "Bitcoin style" and "Rust" are not descriptions of an encryption scheme, nor are they strong indicators of security for a messaging app. Also, unless encrypted DMs are only in app, odds are they aren't just in Rust.

— Ian Miers (@secparam) June 1, 2025

The Bitcoin price remained relatively stable near $105,000 following the XChat announcement, suggesting that Elon Musk's influence on crypto markets may be waning compared to previous years when his tweets could trigger significant price movements.

Current Bitcoin Price Action Today: Bear Flag Formation Signals Caution

According to my technical analysis, the Bitcoin price has formed a textbook bear flag pattern on the four-hour chart, creating concerns about potential downside movement. This bearish continuation pattern emerged after BTC bottomed at approximately $103,100 on May 31, with the cryptocurrency consolidating in an upward parallel channel following the sharp decline from its $111,814 all-time high reached on May 22.

The bear flag pattern projects a potential Bitcoin price target of $97,709 if the support at $105,000 fails to hold. This technical setup should be closely monitored with the psychological support levels, particularly the $100,000 mark and the yearly opening around $92,000.

Key resistance and support levels to watch:

• Immediate resistance: $108,000 - $112,000
• Critical support: $103,000 - $105,000
• Major support: $97,600 (200-day moving average)
• Bearish target: $85,000 in worst-case scenario

AI Models Bitcoin Price Predictions Show Recovery Despite Short-Term Weakness

Despite the current bearish technical setup, artificial intelligence models remain optimistic about Bitcoin price prospects for the remainder of June 2025. ChatGPT's analysis suggests a base-case prediction of $118,000 by June 30, highlighting Bitcoin's resilience and the possibility of renewed bullish sentiment.

The AI model estimates a 65% probability that Bitcoin will finish June above $110,000, though breaking $130,000 would require a major bullish catalyst. Meanwhile, xAI's Grok offers a more conservative outlook, predicting Bitcoin will trade around $108,000 by month-end, assuming continued institutional inflows and favorable regulatory developments.

Multiple price prediction models show varying scenarios:

• Changelly forecast: Peak at $137,189 by June 7, with support at $104,329
• LongForecast projection: Range between $115,561 and $132,957 for June
• CoinDCX analysis: Potential test of $114,000-$116,000 mid-June if bulls maintain control

Bitcoin Price Prediction Table

Why Is Bitcoin Going Down? Trade Tensions and Market Dynamics

The recent Bitcoin price decline can be attributed to several interconnected factors affecting global risk sentiment. Rising US-China trade tensions have prompted investors to move away from risk assets, including cryptocurrencies, creating downward pressure on Bitcoin and other digital assets.

I also discussed why the price of Bitcoin is falling in last week's analysis, which covered four consecutive days of broad market declines. In addition to Bitcoin, Ethereum, Dogecoin, and XRP also lost value.

Primary factors driving current weakness:

• Geopolitical tensions: US-China trade negotiations creating uncertainty
• Technical resistance: Strong selling pressure near $112,000 level
• Profit-taking: Traders securing gains after May's 11% rally
• Correlation with traditional markets: Increased sensitivity to macroeconomic conditions

The cryptocurrency market's correlation with traditional financial markets has become more pronounced, with central bank decisions and labor market data increasingly driving crypto price movements. This shift represents a significant change from Bitcoin's earlier days when it traded more independently of traditional asset classes.

Bitcoin Trading Strategy and Risk Management for Retail Traders

Given the current market dynamics, retail traders should focus on risk management rather than aggressive positioning. The formation of the bear flag pattern suggests waiting for clear directional signals before entering new positions, particularly around the critical $104,800 support level.

Recommended approach for retail traders:

• Monitor key levels: Watch for breaks above $108,000 or below $103,000
• Volume confirmation: Look for increased trading volume to confirm breakouts
• Risk management: Use stop-losses and position sizing appropriate for volatility
• Patience: Avoid FOMO trading during uncertain market conditions

The Bitcoin price outlook for June 2025 hinges on whether bulls can defend the $105,000 level and rebuild momentum toward new highs. While short-term technical indicators suggest caution, the longer-term institutional adoption narrative remains intact, providing a foundation for future growth.

As we navigate this critical period, retail traders should remain informed about both technical developments and fundamental factors affecting the cryptocurrency market. The intersection of traditional finance and digital assets continues to evolve, creating both opportunities and challenges for those willing to adapt their strategies accordingly.

Bitcoin News, FAQ

Is Bitcoin Going to Rise Again?

Yes, Bitcoin is expected to rise again based on multiple institutional forecasts and historical patterns. The cryptocurrency market has demonstrated remarkable resilience through previous crashes in 2013, 2018, and 2022, each time emerging stronger and more mature3. Several factors support a recovery outlook for 2025, including rising institutional demand, favorable post-halving supply dynamics, and robust on-chain fundamentals indicating long-term holders are in control.

What If You Put $1000 in Bitcoin 5 Years Ago?

A $1,000 investment in Bitcoin made 5 years ago (2019) would have grown to approximately $8,402 based on October 2024 pricing data. This represents a remarkable 740% return on investment, demonstrating Bitcoin's potential for long-term wealth creation despite short-term volatility.

For perspective on Bitcoin's historical performance:

• 1 year ago (2023): $1,000 would be worth approximately $2,370
• 10 years ago (2014): $1,000 would now be valued at $176,994
• 15 years ago (2009): $1,000 invested at Bitcoin's inception would be worth an astounding $68.3 billion

Why Has Bitcoin Dropped Today?

Bitcoin dropped today primarily due to stalled US-China trade talks, which created macroeconomic uncertainty and triggered risk-off sentiment among investors. US Treasury Secretary Scott Bessent's confirmation that trade negotiations with China have stalled dampened investor sentiment across global markets.

Additional factors contributing to today's decline include massive liquidations totaling over $683.4 million in crypto futures within 24 hours, with long positions accounting for $617.85 million of these liquidations. The technical breakdown occurred as the total crypto market cap broke below the critical $3.35 trillion support level, triggering algorithmic selling and stop-loss orders.

Who Owns 90% of Bitcoin?

No single entity owns 90% of Bitcoin. The largest individual holder is Satoshi Nakamoto, Bitcoin's anonymous creator, who owns an estimated 968,452 BTC (approximately 4.6% of total supply). These bitcoins are spread across approximately 20,000 addresses and have remained untouched since Satoshi left the project in 2010.

The largest institutional holder is MicroStrategy, which has acquired 568,840 BTC, representing roughly 2.7% of the total supply.