The instability in the cryptocurrency market last week continued throughout the weekend. A brief break above $50,000 was unsustainable, leading to another breakdown. Moreover, support at $46,000 did little to stop the massive losses; hence BTC dived near $42,000, a three-month low.
Elon Musk blamed for crashing Bitcoin
The founder is Tesla, Elon Musk has been called out for crashing Bitcoin. Since the beginning of the year, Musk has been what they call the “crypto ambassador.” His support for Dogecoin remains insatiable, while his actions toward Bitcoin were very positive. Tesla bought around $1.5 billion worth of BTC and accepted the crypto as payment for its vehicles.
Unfortunately, Musk dropped the bombshell on Bitcoin last week, saying that Tesla had suspended Bitcoin payments citing high energy consumption during mining and transaction processing. The company pledged that it would keep its holdings until Bitcoin mining moves away from fossil fuel and embraces sustainable energy.
Bitcoin dipped first to $46,000 and recovered to $51,000. As mentioned, the dumping progressed into the weekend session, with BTC dropping to $42,000. Meanwhile, the bellwether cryptocurrency trades at $43,500 amid a minor recovery.
The Relative Strength Index (RSI) on the four-hour chart highlights oversold conditions, hinting at a possible recovery. Perhaps a break past $45,000 will open the door for an upswing past $50,000.
BTC/USD four-hour chart
It is worth mentioning that the Moving Average Convergence Divergence (MACD) has a bearish impulse. In addition to diving more profoundly in the positive region, the MACD line’s (blue) divergence under the signal line expands. In other words, Bitcoin is not out of the woods, and a drop to $40,000 cannot be ruled out.
Despite the massive drop in price over the last few days, Fundstrat’s Tom Lee is bullish on Bitcoin. The analyst recently told Business Insider that he sees BTC lifting the range between $100,000 and $125,000 by the end of 2021.
Bitcoin intraday levels
Spot rate: $43,500
Trend: Short-term bullish bias
Resistance: $46,000 and $51,000