Bitcoin Fails to Challenge $40K And Falls Back To Support
Bitcoin Falls $40K as Musk Fires Ambiguous Tweets
By Bogdan Giulvezan
Since Tesla kingpin Elon Musk expressed concerns regarding Bitcoin’s environmental impact, the flagship digital currency has been on a skid, losing more than 40% compared to April’s high at $64,800.
Yesterday, Bitcoin managed to break the $39,000 barrier but wasn’t able to put any pressure on $40,000, and today it dropped yet again, currently trading in the $36,500 area. Guess why… Mr. Musk is using Twitter again to “troll” (as some would say) the crypto world.
This time, he posted some ambiguous broken heart emoji alongside “#Bitcoin”, followed by some breakup memes. In response, Bobby Ong co-founder of CoinGecko said “He’s trolling the community” and Tron Network founder Justin Sun stated: “I will buy all the Bitcoin that Elon Musk sells”.
It’s debatable whether this means that Tesla sold its Bitcoin assets or maybe the CEO is looking to buy more and thus, he aims to drive the price lower and buy at a “discount”. Either way, it’s mind-blowing to see how one man’s tweets can have such an effect over inexperienced traders and how a few words can trigger double-digit losses for the world’s biggest cryptocurrency.
It goes to show that we are still dealing with a very young market, in which you should never invest more than you can afford to lose. Funny enough, Tesla’s stock price fell more than a third since February when it announced a $1.5 billion Bitcoin purchase. I guess Tesla and Bitcoin are going hand in hand now.
Technical Outlook – BTC/USD
The pair shows rejection around the $39,000 mark but most of this can be attributed to the latest Tesla CEO tweets, which seem to overshadow the technical aspect of the chart. Depending on how market participants are taking this, the slide may extend closer to $30,000 support but a break of that level has a low probability of happening (at least as long as Musk’s Twitter feed stays silent).
The Relative Strength Index and the MACD are both showing signs of bullish movement but as long as the pair stays below $40,000, we cannot put a lot of weight on the two indicators; in other words, don’t assume that price will go up just because the RSI and the MACD are moving slightly up.
A break of $40K would be indicative of more bulls entering the scene but considering that the initial drop was triggered by non-technical factors, it would probably take the same type of influence to drive price back into the green territory.
