After Elon Musk reverses the decision to accept Bitcoins as a payment method to buy Tesla, FUD has taken over and the market suffered a flash decline. Will the drop continue? Let’s find out.
On May 13, 2021 Elon Musk Tweeted “Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions” He also added “Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as
mining transitions to more sustainable energy. We are also looking at other cryptocurrencies
that use <1% of Bitcoin’s energy/transaction.”.
Tesla and Elon Musk still hold long billions of dollars of bitcoin but FUD caused the investors and traders to cash out and prices fell to $46000 and , the worse, Tesla shares also tasted the dip.
There is a lot going on both fundamental and technical perspectives, now let’s take a closer look on technical analysis and see what does the chart say.
From a technical perspective, we see that Bitcoin has been in a rising channel since February and reached an ATH of $65K in the middle of April. Near the end of April, Bitcoin printed a lower low @ $47K where it temporarily broke below the channel before quickly getting back within the channel, upon which price started to rally. The key area from that point was the golden pocket of $59-60K.
Bitcoin needed to break above that zone in order to invalidate the lower low and continue the uptrend. Bitcoin spent many days retesting that level multiple times. Just as it seemed as if Bitcoin would finally break through $59K, Elon Musk’s tweet sent the price of Bitcoin crashing to a low of $46K. And thus, we now have a lower low, followed by a lower high, followed by a lower low, which technically means that we have entered into a bear market.
Bitcoin intraday levels:
Current Price (USD): $50690
Trend: Neutral, Consolidating
Volatility: Very High