Tips for traders, 18 May 2021
Early in February 2021, Elon Musk announced a $1.5 billion purchase of Bitcoin from Tesla’s $20 billion cash, making Bitcoin a cash reserve for the company. This announcement marked Mr Musk’s involvement in the Bitcoin community.
Soon this involvement led to fear in the community as Tesla seems to have sold its Bitcoin. This came after Mr Musk’s public announcement that Tesla would stop receiving Bitcoin payments due to the energy usage in Bitcoin mining, considering Tesla’s vision of clean energy.
At the same time, according to Reuters, Tesla is applying to the Environmental Protection Agency (EPA). There are many people in the Bitcoin community who think that the flight of Mr Musk could be good. It might bring a healthier community that is not driven by only one person.
From a technical perspective, we can see that the price has reached the level breached at the beginning of February. The surge after Tesla’s acquisition has basically reset.
For now, the price could go sideways before showing any new sign of an uptrend. $38,000 to $40,000 could be a very strong zone for the price to sit for a while. Meanwhile short-term trades might make sense while maintaining a manageable amount of risk.