Elon Musk tweets BTC price bottom? 5 things to watch in Bitcoin this week

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Bitcoin (BTC) is nearing $40,000 this week as “Dogefather” Elon Musk offers out pure ache to hodlers — what’s subsequent?

After a traumatic weekend for a lot of crypto traders, Monday is setting the stage for the following chapter within the wild 2021 bull market.

Cointlegraph takes a have a look at 5 components which might form what Bitcoin and altcoins do subsequent.

Musk tweet hits key Bitcoin technical stage

It’s all about one man but once more this week: Elon Musk. In attribute style, the Tesla and SpaceX CEO brought on uproar on Twitter when he got here out bearish on Bitcoin.

BTC/USD offered off immediately on information that Tesla was halting BTC funds for its merchandise, however for Musk, this was not sufficient.

Additional tweets over the weekend, together with criticism of Bitcoin’s decentralization and the way he “believes in crypto,” added gas to the hearth.

It was a touch that Tesla could already be planning to promote its holdings, nevertheless, that brought on essentially the most distress. Bitcoin fell to close $42,000, retesting this earlier all-time excessive stage earlier than steadying as Musk pressured that no sale had occurred.

“To make clear hypothesis, Tesla has not offered any Bitcoin,” he wrote on Monday.

BTC/USD chart with Twitter occasions highlighted. Supply: Twitter

With Musk versus the cryptocurrency group starting to appear like a full on war, Bitcoin is thus unsurprisingly unstable as all eyes stay on the Twitter battlefield.

On the time of writing, Bitcoin was buying and selling at round $44,800, nonetheless down 8.7% over the previous 24 hours.

As analyst Alex Krueger famous, nevertheless, the clarifitication tweet could also be unwittingly appearing as a local bottom signal, as Musk posted it simply as BTC/USD hit a key 61.8 Fibonacci retracement stage.

“Elon Musk should be an impressive technical analyst,” he commented.

“His ‘Tesla has not offered any Bitcoin’ tweet was posted precisely at Bitcoin’s key technical stage, the 61.8 fib ($42,845).”

BTC dominance falls beneath 40%

Musk’s actions have had a detrimental affect on Bitcoin and altcoins alike.

Regardless of continuing to praise Dogecoin (DOGE), even the meme-based token did not keep away from losses over the weekend, with nearly all of large-cap altcoins following Bitcoin down.

There have been some much less vital losses, similar to these of Cardano (ADA), which on Saturday was nonetheless bucking the general downtrend to even put up new all-time highs.

When it comes to bearishness, nevertheless, nothing exhibits how a lot the common Bitcoin holder is struggling like market dominance.

On Monday, Bitcoin’s general market cap share dipped below 40% for the primary time since June 2018.

Bitcoin market cap dominance chart. Supply: CoinMarketCap

Already on the best way out, dominance was dealt a big blow due to the latest Bitcoin worth strain, whereas alts similar to Ether (ETH) benefitted.

“The Bitcoin dominance remains to be falling,” standard Twitter dealer The Moon summarized over the weekend.

“The alt season will not be over but. However my intestine feeling is that the tip is close to!”

Bitcoin fundamentals present calm

For all of the nerveracking worth motion, in the meantime, nothing supplies a bullish counterpoint to the present Bitcoin narrative than its community fundamentals.

Even after its $42,000 dip, Bitcoin is extra enticing than ever for miners, and its community safety is subsequently additionally extra strong than ever earlier than.

As Cointelegraph reported, each hash charge and issue have staged a miraculous restoration in latest weeks, reclaiming all-time highs after a miner washout brought on its personal temporary worth crash.

The weekend proved to be no completely different, with weekly common hash charge topping 180 exahashes per second (EH/s) for the primary time.

Bitcoin 7-day common hash charge chart. Supply: Blockchain

Problem remains to be on monitor to extend by over 10% on the subsequent automated readjustment in 11 days’ time. The earlier readjustment on Could 14, at 21.5%, was the biggest optimistic shift since June 2014.

“Bitcoin’s mining issue hitting an all-time excessive simply after tesla’s announcement is a chef’s kiss,” Alex Thorn, head of firmwide analysis at crypto service provider financial institution Galaxy Digital, said final week.

Greenback bounces at help

Taking a break for crypto-specific triggers, the broader macro image could but present some inspiration for worth trajectory.

After plunging late final week, the energy of the U.S. greenback is returning. The U.S. greenback forex index (DXY) is bouncing off acquainted help — surges in its energy tends to supply teething problems for BTC/USD.

U.S. greenback forex index (DXY) 1-day candle chart. Supply: Tradingview

On the similar time, shares are bullish in China however performing averagely in Europe and the U.S. Coronavirus, with localized peaks in some jurisdictions however fewer instances in others, joins the melting pot.

Amongst merchants, nevertheless, it’s inflation that could be a key difficulty. A broad international rebound from the time of lockdowns and different restrictions creates issues for these making an attempt to engineer it — particularly, the U.S. Federal Reserve and different central banks.

“The worldwide financial restoration is properly below method; that’s what’s fueling the inflation fears,” Olivier d’Assier, Qontigo head of APAC utilized analysis, told Bloomberg.

After inventory markets’ rip roaring 12 months, he added, urge for food for revenue taking shall be understandably rising.

Bitcoin nonetheless beats its final bull market

Is it 2013 or 2017 when it comes to the Bitcoin bull market?

Among the many business’s best-known names, there is no such thing as a trace of bearishness — all that continues to be to do is analyze the character of the present retracement and evaluate it to years previous.

This week, stock-to-flow creator PlanB notes that for all of the Musk drama, Bitcoin remains to be performing higher than throughout its 2017 run to $20,000. This regardless of the $42,000 dip formally being Bitcoin’s greatest this bull cycle and because the cross-asset crash of March 2020.

“As we speak looks like 2017 bull market (esp. in the course of the fork conflict),” he tweeted on Monday, invoking recollections of the delivery of Bitcoin Money (BCH).

“It isn’t a straight line to the following ATH, however lots of volatility (a number of -30% dips). HODL.”

BTC/USD stock-to-flow chart as of Could 17, 2021. Supply: Digitalik

Calling for calm and zooming out is a key function amongst seasoned Bitcoiners. As Cointelegraph reported final week, stock-to-flow stays unviolated by Musk or some other episode of downward volatility.

An accompanying survey in the meantime revealed {that a} majority of 35,000 respondents imagine that BTC/USD will nonetheless hit $100,000 this 12 months.