Musk crashed Bitcoin. Time to buy dips?

Gold & the USDX: Correlations

What happened?

Elon Musk, Tesla’s founder and CEO, said the company wouldn’t accept Bitcoin as payment any longer. As a result, BTC/USD dropped to $45,300, the low unseen since March.

Why has Musk done that?

He explained his actions with environmental issues: “rapidly increasing use of fossil fuels for Bitcoin mining and transactions”. Indeed, this problem exists. According to Citigroup’s report, Bitcoin mining is consuming 66 times more electricity than it did back in late 2015, and as a result, carbon emissions are increasingly rising.

What’s next?

He won’t sell any of the Bitcoin Tesla already holds and what’s more important, he signaled he might accept other cryptocurrencies as payment if they are less energy-intensive. Well, what would be his next #1 crypto? Maybe Dogecoin? He asked about that his followers on Twitter already: 78% said yes. There are some talks about ETH and XRP right now.

What about Bitcoin?

Musk’s tweet can’t make an end to Bitcoin. The BTC is still the #1 cryptocurrency by the market cap and it’s likely to keep its uptrend in the long term. For most investors, it’s just a good opportunity to buy the dips.

Tech tips

The RSI indicator hasn’t yet crossed the 30.00 level on the daily chart. Therefore, there is still some room to fall further, but probably the price reverses up from the current levels. If it jumps above the midline of Bollinger Bands at $55,000, the way up to $60,000 will be open. In the opposite scenario, the move below the lower trend line at $48,000 will press down the crypto to the $45,000 support.

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Musk crashed Bitcoin. Time to buy dips? - 1

Gold & the USDX: Correlations

Financial market analyst of FBS. With a strong background in finances and investments, Kseniia has a deep knowledge of the Forex market.