BTC drops below $30k (£24k) as the ‘Elon Effect’ boost wears off…

Is Bitcoin doomed if Musk abandons it?

April 27, 2023
BTC drops below $30k (£24k) as the ‘Elon Effect’ boost wears off…
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  • Despite a strengthening of favourable indications, the price of bitcoin is retreating.
  • According to Tesla's Q1 financial report, the corporation did not touch its Bitcoin reserves.
  • The market reaction to Elon Musk's transition from cryptocurrency to artificial intelligence may go either way.

The widespread perception is that cryptocurrency investments are exceedingly risky. Bitcoin (BTC), the largest crypto asset (Bitcoin Price History), is also subject to similar reasoning, which is waiting for a cue from the market as a whole or from one particular person, Elon Musk.

Musk, possible exit from crypto

The frequency with which Musk discusses cryptocurrency and similar issues has decreased over the last several months. Elon Musk has been relatively quiet while Bitcoin has continued its bullish rise, breaking above the $30,000 threshold this week. When Tesla is taken into account, however, this lack of influence becomes more apparent.

Tesla has maintained its current BTC balance as of the most recent quarterly earnings report. Elon Musk has not sold any of his approximately 11,950 BTC worth $350 million (£280 million) despite giving up the asset in 2021. Even if the absence of selling is a positive indicator, investors now do not appear to care.

Consequently, this indicates that the crypto market is decoupling not just from the TradFi market but also from the influence of influencers, thus shifting the focus back to the fundamentals of supply and demand.

Regardless, Elon Musk's exit from the cryptocurrency space is mostly attributable to the development of artificial intelligence (AI). Musk recently said that he will be shifting his attention away from cryptocurrency and onto artificial intelligence.

Is Bitcoin doomed if Musk abandons it?

As currencies continue to spiral, the effects of Elon Musk's departure from the cryptocurrency industry are two-sided. On the one hand, the potential for harm will diminish. On the other side, crypto assets will be surrounded by widespread fear.

The bad effect is that Twitter owner Elon Musk may manipulate the value of digital assets whenever he wants. There would eventually be an end to this. Musk may liquidate Tesla's Bitcoin holdings if he decides to abandon cryptocurrency altogether. This would trigger a flurry of selling that might lead to another BTC bear market.

Simply said, Elon Musk still has a lot of influence in the crypto market and may affect the price of any asset. Many investors are wary of investing in anything, given the possibility that Musk's interest in it may cause its value to rise or fall without any effort on his part.

Lack of a clear trend…

Bitcoin's lack of a clear trend, pushing investors to favour gold, has left the market unsure about the cryptocurrency's future move.

  • When Bitcoin's price retests the weekly bearish breaker, it demonstrates weakness, sowing seeds of doubt in the minds of would-be buyers.
  • Although the positive prognosis has not yet been disproved, investors should proceed with caution.
  • If buyers persist, BTC may retest the $35,260 middle point and the $41,273 range highs.

In the weekly time frame, the price of Bitcoin has formed a bearish breaker, warning purchasers to tread carefully. Since a reversal is not yet unambiguously predicted, this signal is equivocal. So, it is not out of the question that 2023 BTC continues its uptrend

Lack of directional bias in Bitcoin's pricing

There has been a meteoric rise in the price of bitcoin since its apparent low in the fourth quarter of 2022. BTC has gained 70% so far this year, reaching a yearly high of $30.968. 

Bitcoin's most recent upward movement broke a weekly bearish breaker that had been in place from $29,247 to $41,273. Intense selling pressure characterises a bearish breaker situation, as discussed at length in a prior post. 

Two higher highs with a down candlestick in between them make up the technical configuration. Investors should monitor the price action of the asset after the formation of a second higher high and subsequent retracement. A bearish breaker has formed if the valley quickly collapses, resulting in a new lower low. 

In order to enter short positions, traders must now watch for the underlying asset to retreat and retest the breaker. 


When do you use a breaker setup?

After breaking over the bearish breaker, the Bitcoin price has begun to see substantial selling pressure. While it did rise last week, Bitcoin has given up all of those gains and is now trading at $28,237. 

The price of Bitcoin (9 Best Crypto Wallets UK) may go one of two ways from here:

  • A continuation of the bull run that extends the rally after the breaker's midpoint at $35,260 or the range high at $41,273 creates a possible local top.
  • The Fair Value Gap (FVG) and the centre of the bearish breaker will converge if the Bitcoin price keeps rising. You may take profits and prepare for a possible local top formation at the orange-highlighted FVG, which stretches from $34,277 to $37,406. The upper limit of the breaker is $41,273, suggesting that any more BTC gains will be met with resistance at that level.
  • The other route is a descent to ground level, or the continuation of bears' persistent effort to drive BTC lower. Bitcoin's price is expected to reach for the weekly FVG in this scenario, which ranges from $26,591 to $22,591. Long-term holders are expected to begin accumulating between $26,591 and $22,591, two interesting support floors in this region of inefficiency. 

The second point presents a gloomy picture, but it is really not so bad for long-term investors. For more, on Google, you can comprehensive macro studies of Bitcoin's underlying technicals. 

Despite the persistent pessimism, on-chain indicators may provide a clearer picture and provide clues as to where the Bitcoin price is headed next.

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