Musk Crashed Bitcoin, Is Dogecoin Next?
FxPro Financial Services Ltd | May 14, 2021 05:49AM ET
The main newsmaker of the crypto market lately is Tesla (NASDAQ:TSLA) CEO Elon Musk. The current rally of the crypto market will be most closely associated with the name of this talented marketer and businessman. Market participants are happy to support any speculation by Musk, regardless of the chosen direction.
It can also be assumed that this man is one of the main triggers of a broad trend reversal in the crypto market. The ease with which Musk manipulates the price of BTC and DOGE points to their extreme fragility.
Bitcoin is down 11% and trading around $50,000. Following Elon Musk's announcement of Tesla's refusal to accept bitcoins as payment for cars, the market reacted with an immediate sell-off of the first cryptocurrency. At one point, the price fell to $47,000, after which Bitcoin began to attract demand from investors who are "hunting" for discounts. On the positive side, trading volumes increased along with the price rebound, which approached $100 billion. Remember that during the peak of the 2017 rally, trading volumes on the Bitcoin network barely reached $20 billion.
Currently, crypto market participants are resting against a very important sentiment barometer - the $50K round level. Many experts agree that this level is a critical point right now, a confident breakthrough of which will give new strength to the BTC bears. So far, the tug of war between pessimists and optimists has been quite sluggish, with the optimists having the upper hand. However, this could now all change, and Musk may play an important role in the process.
The fact is that market participants interpret the statement of the head of Tesla as the position to sell. As a result, Musk became one of the most visible beneficiaries of Bitcoin's growth, and now his refusal to accept BTC as payment for cars strikes a huge reputational blow to the coin, which enjoyed a hype when companies tried to repeat his idea.
Although market participants have recently begun to believe in the autonomy of altcoin price dynamics, the situation with Bitcoin again shows that it is a driving force in the market. Ethereum's 11% drop is not catastrophic, yet the coin has once again fallen below $4K, and the overall situation could set coin holders on the negative side and push them to sell, given the incredible scale of recent growth.
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