Julian Bridgen, co-founder of macroeconomic research firm MI2 Partners, thinks Tesla (TSLA) stocks are showing signs of a bubble. Compare Bitcoin (BTC) shares in 2017 when they reached $ 20,000 and are down 58% in two months.
From an annual high to the end of the month, the TSLA price fell 33.74%. The stock has rebounded over the past 48 hours and posted a massive rebound of 12.46%.
The fractal is unusually similar between the Tesla stock price chart and the Bitcoin price chart
Bridgen shared a Tesla stock chart with part of Bitcoin’s weekly chart from 2016 to 2019. He showed some technical similarities between the two charts and explained:
“What defines a bubble? A good story matters. The better the story, the bigger the bubble. Lots of liquidity and finally the classic bubble chart. For example #bitcoin in 2017. TSLA has three.”
Although there are similarities between Tesla’s charts and Bitcoin, there are several important differences. Firstly, it compares the daily Tesla stock chart to the weekly BTC chart. Second, Tesla as a public company is fundamentally different from Bitcoin’s peer-to-peer digital network.
Additionally, Bitcoin is increasingly seen as a store of value, and it is often referred to as “digital gold.” Investors, both institutions and individuals, use BTC as a way to store and transfer value. For example, on August 11, MicroStrategy bought $ 250 million in bitcoin and accepted it as the company’s primary government asset.
On the other hand, Tesla is the most valuable automobile manufacturer in the world, as its share price depends heavily on the company’s performance.
But while there may be technical similarities between the Bitcoin and Tesla charts – particularly with the correlation between BTC and stocks reaching new highs this summer – the fundamentals are likely to affect TSLA stocks more than technical stocks.
In the short term, analysts say Tesla has three main catalysts that could help its stock recover. Credit Suisse analyst Dan Levy highlighted three factors, such as the S&P 500 listing, battery development day, and stock splits.
Tesla is expected to host Battery Technology Day on September 22. Analysts expect Tesla to announce more durable and efficient battery technology.
Variables such as the release of new technologies and the listing of Tesla shares in the S&P 500 in the medium term could trigger a rally in stocks.
At the same time, some analysts predict that inclusion in the S&P 500 could cause serious problems simply because of Tesla’s size. Levi September 2:
“Of course, there is no guarantee that Tesla will be included in the next expansion due to the challenges of adding a company the size of Tesla.”
As such, it can be said that the pullback of Tesla stock was expected and greatly exacerbated by the recent decline in the Nasdaq.
What do analysts say about the long-term outlook for BTC?
The Bitcoin map is often used at the end of 2017 for comparison with other charts showing vertical clusters.
Since its initial high of $ 20,000, BTC has largely raised between $ 6,000 and $ 10,000 in the long run. It recently briefly crossed the $ 12,000 resistance level and is now showing strength in its ability to stay above $ 10,000.
Several investors, including Three Arrows Capital CEO Su Zhu, said they were surprised by BTC’s stability above $ 10,000, and expressed optimism about the macroeconomic changes.