Key Insights:

• Crypto market crash and liquidation, and US PCE inflation came in higher than expected
• MSTR stock extends fall, hinting at more BTC selloff ahead
• Stock market retreat, Nasdaq 100 crash.

The crypto market crash this week has investors on the edge of their seats. The total crypto market cap fell below $2 trillion for the first time since September 2024.

June is on track to become the most bearish month YTD, courtesy of this week’s crypto market crash. The total market cap has fallen by about 17% so far this month, according to the latest data.

The crypto market crash wiped out roughly 5% of the total market cap this week alone. More importantly, the total market cap bottomed out as low as $1.99 trillion in the last 24 hours.

The bearish price action had a notable impact on liquidations. Roughly $895 million in total liquidations occurred in the last 24 hours. Longs were dominant at $700 million.

Crypto market crash triggers elevated liquidations | Source: CoinGlass

Despite this, peak liquidations this week occurred on Wednesday, when $786 million in longs were liquidated. But the real question now is why the crypto market crash has been happening.

Was a Higher-than-Expected US PCE Data Responsible for the Crypto Market Crash?

Multiple factors influenced the bearish market sentiment this week. However, one of the most prominent reasons for the crypto market crash this week could be the latest inflation print.

According to the latest market data, US PCE for May jumped to 4.1%. This was noteworthy because it is the same tool that the government uses to assess inflation.

US May PCE Inflation data contributes to the crypto market crash | source: The Kobeissi Letter

This was the highest PCE print in more than 2 years, and here’s why it is such a big deal. The higher print suggests that the market could be headed for elevated inflation.

Higher inflation expectations often trigger a change in investor behavior. For example, investors may steer clear of deploying capital under such conditions.

Moreover, June has been no better than May, especially regarding macro factors and disruptions. These factors suggest that the market may not yet be ready for a sizable correction.

Bitcoin Crash Extends MSTR Stock Price

The Bitcoin crash this week caused a slide below $60,000. BTC price has been hovering near this key level, but the impact was much more severe elsewhere, especially on MicroStrategy stock price.

Bitcoin price just concluded its third consecutive day in the red after pivoting this week. The MSTR stock price was on its 8th day in the red.  The stock dropped from as high as $136 in mid-June to $94.6 at the time of observation. A 37% discount since mid-June.

MSTR Stock Price | Source: TradingView

This week marked the first time that the MSTR stock price fell below $100 in over two years. The last time the stock traded below its $86 price tag was in February 2024.

The current price levels certainly have investors feeling uneasy. However, it represents one of the most discounted opportunities, given that MicroStrategy continues to capitalize on discounted BTC prices.

The bloodbath was not just restricted to the crypto market. The Nasdaq 100 has seen two sizable pullbacks so far this month. One could form a double top as the latest one saw it drop by about 4.4%.

Interestingly, the Nasdaq 100 previously maintained a healthy uptrend from March to early June. The bearish market conditions across the board underscore the current weak sentiment. The Nasdaq 100 cooling off means even the top companies were not spared by the liquidity outflows.

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