Bitcoin (BTC) is approaching $ 40,000 this week as Elon Musk’s “Godfather” gives pure pain to fraudsters – what’s next?
After a shocking weekend for many cryptocurrency investors, Monday lays the groundwork for the next chapter in the Wild Beef Market of 2021.
The Cointlegraph examines five factors that could affect the future of Bitcoin and altcoins.
Mask Tweet is the key to the technical level
This week he’s talking about a man again: Elon Musk. Impressively, Tesla and the president of SpaceX sparked riots on Twitter when they took a bearish stance on Bitcoin.
BTC / USD was on sale right after the news that Tesla had halted BTC payments for its products, but that wasn’t enough for Mask.
Additional tweets over the weekend, including criticism of Bitcoin’s decentralization and its “belief in cryptocurrency,” added fuel to the fire.
That was a hint that Tesla was already planning to sell its assets, but that caused the most pain. Bitcoin fell to nearly $ 42,000, beating a previous high as Musk confirmed that there were no sales.
“To clarify the speculation, Tesla did not sell bitcoins,” he wrote on Monday.
BTC / USD chart with featured Twitter events. Source: Twitter
The Musk and crypto community is starting to look like a war, which is why Bitcoin is surprisingly volatile as all eyes remain on the battlefield on Twitter.
At the time of writing, Bitcoin has been trading at around $ 44,800, down 8.7% over the past 24 hours.
However, as analyst Alex Kruger pointed out, the caption tweet could unintentionally act as a local bottom signal as Musk posted it just as BTC / USD reached the key 61.8 Fibonacci retracement level.
“Elon Musk has to be a great technical analyst,” he commented.
The tweet “Tesla didn’t sell a single bitcoin” was posted exactly on the main technical level of the bitcoin coin, 61.8 fib ($ 42,845). ”
BTC dominance drops below 40%
Musk’s actions had a detrimental effect on both bitcoin and altcoins.
Despite the continued praise for Dogecoin (DOGE), the meme-based token wasn’t able to avoid losses over the weekend, with most of the major capital expenditures dropping after Bitcoin.
There were also less significant losses, for example from Cardano (ADA), which still suffered a general downturn on Saturday and even registered new full-time glasses.
However, when it comes to bearish sentiment, nothing shows how much the average Bitcoin owner suffers from market dominance.
On Monday, Bitcoin’s total market capitalization fell below 40% for the first time since June 2018.
Bitcoin market dominance chart. Source: CoinMarketCap
Already at the end of the dominance, a big hit was dealt thanks to the recent price pressure on Bitcoin, while everything, like Ether, had an edge.
Popular Twitter trader The Moon summed up over the weekend: “Bitcoin’s dominance is still waning.”
“The fall season is not over yet. But I intuitively feel the end is near!”
Bitcoin basics provide peace of mind
Meanwhile, for all of the nervous price action, nothing offers a bullish counterpoint to the current Bitcoin listing other than the network base.
Even after dropping $ 42,000, Bitcoin is more attractive than ever to miners, and thus, network security is also more reliable than ever.
According to a Cointelegraph report, the hash and hardship rate has miraculously recovered in recent weeks, returning to all-time highs after an influx of miners caused prices to plummet in the short term.
The weekend was no exception: For the first time in the week, the average hash was 180 exaheshes per second (EH / s).
Graph of average Bitcoin hash rate over 7 days. Source: Blockchain
The difficulty will continue to increase by more than 10% after the next automatic adjustment after 11 days. The previous May 14 change of 21.5% was the largest positive change since June 2014.
“The bitcoin mining challenge of reaching an enduring high after the Tesla announcement is the kiss of a chef,” Alex Thorne, head of corporate research at Galaxy Digital Cryptocurrency Bank, said last week.
Dollar is rebounding from support
If you take a breather for the cryptocurrency triggers, the wider overall picture can still provide some inspiration for the price path.
After a sharp decline at the end of last week, the US dollar is back in strength. US Dollar Index (DXY) is bouncing off known support – increased strength tends to cause dental problems for BTC / USD.
US dollar index (DXY) chart for one day. Source: Tradingview
Meanwhile, stocks in China are optimistic, but average in Europe and the United States.