Bitcoin or Fiat? How Elon Max undermined faith in BTC

A few days ago, Elon Musk published a message that Tesla is suspending accepting payments in bitcoins due to the negative impact of mining on the environment, which has collapsed the rate of the first cryptocurrency. Musk hinted on Sunday that Tesla may or has already sold its bitcoins. This led to a drop in the bitcoin rate to $ 42,000.

Will bitcoin fall further, or will large buyers quickly buy back the drawdown? Nikolay Dudchenko, an independent financial analyst, answered a question from Fortrader magazine.

– Elon Musk, one of the richest people on the planet, again seriously influenced the cost of cryptocurrencies. His Twitter posts that Tesla will no longer accept payments in bitcoins and in hinting that the company may be going to completely sell the cryptocurrency it bought a few months ago, the market has collapsed locally. Bitcoin lost a little less than 30% and reached a local low of $ 42,000.

Bitcoin exchange rate today

Tesla began accepting crypto payments relatively recently, and at the end of March it had already transferred 10% of the bitcoins purchased for $ 1.5 billion to fiat. Then the market took this message relatively calmly. Tesla, which tests the liquidity of the crypto market, was rather perceived as a positive fundamental background – many even made bets on which major company would follow the trend next.

Now the situation has changed to the opposite. And although Elon nevertheless “in order to avoid speculation” later clarified that Tesla no longer sold cryptocurrency, FUD has already begun. The fear and greed index reached 20 points. The last time such an indicator was observed during the March collapse in 2020.

There is an inflow of capital on the exchanges, mainly from whales, which is a medium-term signal for a decline. Add to this the weakening positions of Coinbase, MicroStrategy and a record discount on GBTC amid weak Price Action of the main cryptocurrency near $ 60,000. And it turns out that Elon Musk, with his tweets, simply set fire to the already formed bear wick.

And the most interesting question: when will the current correction end? Overall, past BTC bullish trends have experienced a 40% drawdown. From the current maximum it will be in the region of $ 39,000-40,000, so the answer to the question posed will be received quickly enough. Breaking through this zone will lead to a new round of panic sale, a medium-term downtrend and Bitcoin at $ 30,000 and below.

On the other hand, the $ 40,000 level should act as strong local support and can be seen as a neat buy area for BTC. The daily RSI is already practically in the oversold zone, and the market sentiment is close to panic, which signals a good entry point.

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