Musk vs. Trump Turns Ugly: Bitcoin and Tesla Stocks Take the Hit

Bitcoin seems to have taken another hit as Elon Musk and Trump’s political storm intensifies. The renewed feud centered around Trump’s “Big Beautiful Bill”, has spilled onto social media and into the broader market, taking BTC out of its range and into liquidation territory.

This isn’t just another political drama. Musk’s growing opposition to Trump’s fiscal policy, combined with threats of a new political party and Trump’s comments on government subsidies, has created a macro backdrop. Traders are now watching $106,100 as the pressure mounts.

Bitcoin Slumps as Market Reacts to Political Fallout

Bitcoin dropped after Musk publicly escalated his criticism of the bill Trump has been backing. Having called out lawmakers who supported the bill for “selling out”, Musk said those responsible should “hang their heads in shame” and get defeated in next year’s primaries. That has stirred the political markets with traders thinking increased uncertainty could lead to a flight from high risk assets like crypto.

At press time, Bitcoin was trading at $106,827 down 0.91% on the day. The 24 hour high was $108,317 and the low $106,759. Technicals are now watching $106,100 as a key liquidity zone. If broken, it could unlock a cascade of long liquidations on leveraged positions and take Bitcoin back to $104K-$105K.

Musk vs Trump: Political Firestorm Moves the Market

The feud between Elon Musk and Trump reignited over the weekend after Trump’s spending bill came under fire. Trump has been calling it the “Big Beautiful Bill”. Musk on the other hand has been campaigning against what he calls irresponsible fiscal expansion.

On July 1st, Musk posted a poll on X asking if a new political party was needed. Over 80% said yes, fueling speculation that Musk might seriously consider an independent political movement. He didn’t mention Trump in the post but his follow up comments made it clear Trump was in his crosshairs.

Musk called out politicians who supported the bill as hypocrites, saying they had abandoned their promises to reduce government spending. His threat to make sure they get defeated in the primaries added to the fire.

Trump didn’t stay silent. He posted on Truth Social that subsidies to Musk’s companies especially in the EV space could be reevaluated.

“DOGE may look into cutting Elon Musk subsidies” he wrote.

Musk responded:

“CUT IT ALL. Now.”

He said government spending had to be cut and no one gets special treatment, not even him.

This triggered a big drop in Tesla stock, TSLA closed at $317.66 on Monday, down 1.8% and then fell to $311.19 after hours. 

Bitcoin Feels the Shock: Traders Prepare for Volatility

The impact on Bitcoin may seem indirect but analysts say it’s all about broader market sentiment. Musk is one of the most influential voices in crypto and any macro tension tied to him sends waves through the digital asset market. His influence on Dogecoin and even Bitcoin is well documented, from price surges to volatility spikes after a single tweet.

“Bitcoin is walking a tightrope here,” said CryptoQuant analyst Ki Young Ju. “Technical support at $106K is thin and the political climate has added more uncertainty.”

Moreover, the fear of increased regulatory targeting, especially if political heat turns towards tech billionaires, will dampen risk appetite across crypto. Liquidity dries up during uncertain political environments and this week’s headlines may push institutional investors to the sidelines.

Funding rates across major exchanges have already turned negative, indicating bearish sentiment among leveraged traders. If price dips below $106,100 with volume confirmation, many expect a test of the $104,000 area which was support in mid-June.

Conclusion: Bitcoin Dips as Politics Disrupts Market

Bitcoin price dips this week are no longer just about technicals, they’re about perception, influence and the growing tension between two of the most polarizing figures in America. Elon Musk’s public defiance of Donald Trump’s fiscal agenda and threats to launch a new political party has spooked the market.

Tesla stock is tanking and Bitcoin is near a critical support level. For crypto traders, the next few days will decide if Bitcoin holds above $106K or corrects harder.

Summary

Bitcoin price drops below $107K as a high-profile feud between Elon Musk and Trump hits the market. Musk called Trump’s “Big Beautiful Bill” a disaster, proposed a new political party and warned lawmakers of electoral consequences. Trump responded by threatening Musk’s EV subsidies. As tensions rose, Tesla stock fell 10% and Bitcoin to $106,834. Traders now watch $106,100 as the critical support level.

FAQs

Why did Bitcoin price drop below $107K?

Bitcoin fell due to the escalated political tension between Elon Musk and Trump, causing broader risk-off sentiment across crypto and tech.

What’s the significance of the $106,100 level?

$106,100 is the support zone. If broken, it could trigger massive liquidations and push BTC to $104K or lower.

How did Tesla stock react to the Elon Musk and Trump clash?

Tesla stock dropped 10% in a week, with more after-hours declines as investors react to Trump’s subsidy threats.

Did Elon Musk propose a new political party?

Yes, Musk posted a poll on X supporting a new political party, which got 80% approval, sparking speculation of a political move.

Glossary

Big Beautiful Bill – A federal spending bill promoted by Donald Trump, currently under public and political scrutiny.

DOGE (Department of Government Expenditure) – A term Trump used, possibly referencing budgetary oversight while jokingly invoking Dogecoin.

Funding – Payment between long and short in perpetuals; negative means bears are in control.

Liquidation – Forced close of a leveraged position due to margin call; often causes big moves.

Volatility Window – Time of big price swings caused by external events (politics, macro).

Sources

Elon Musk on X – July 1 Political Poll

Trump on Truth Social

Tesla Inc. Stock Quote (TSLA)