bitcoin (B T c) Prices fell nearly 5% on June 4, continuing their decline in Friday’s session as investors grappled with Elon Musk’s cryptic tweets on the cryptocurrency, fueling speculation that the Tesla CEO could dump the firm’s remaining 43,2000 BTC stash. can do.
— Elon Musk (@elonmusk) 4 June 2021
Nevertheless, the decline in bitcoin’s move coincided with a large spike in the US dollar index (DXY), prompting speculation that more than one factor accelerated the cryptocurrency’s dramatic decline in late Thursday and early Friday sessions.
In retrospect, the US dollar index, which measures the greenback’s strength against a basket of top foreign currencies, rose 0.18% to a three-week high of 90.627 following Musk’s tweet. Meanwhile, bitcoin price fell 9.31% to hit an intraday low of $35,593 in the same period.
The chart below shows bitcoin’s immediate reaction to Musk’s tweet – a large red candle on the hourly chart followed by an extended decline. While not specifically reacting to Musk’s anti-Bitcoin tweet, the dollar also embarked on a sustained upward move in traditional markets, eventually entering its biggest daily gain since September 2020.
Seasonal cryptocurrency traders understand bitcoin As an anti-dollar asset, mainly because the benchmark crypto proposes to serve as a haven against fiat devaluation. The narrative has mainly gained momentum after the March 2020 global market crash led by the COVID-19 pandemic.
The incident prompted the Federal Reserve to implement unprecedented supportive measures, including near-zero interest rates and an unlimited bond-buying program, to protect the US economy from the aftermath of the pandemic.
Meanwhile, the US government launched three consecutive stimulus programs – $2.8 trillion in March 2020, $900 billion in December 2020 and $1.9 trillion in March 2021 – to help Americans through direct-check payments. more chances on the way.
Expansionary policies increased the US public debt burden from $24.97 trillion in April 2020 to $28.174 trillion in April 2021. As a result, the dollar’s strength against major currencies is down by over 12.5% since March 2020. Meanwhile, the performance of bitcoin in the same period sits north of 855%.
Despite the high volatility, bitcoin has outperformed them all in the recent 10 years. pic.twitter.com/TIae6U7Pto
— Vince Prince (@Vince Prince244) 2 June 2021
Thursday night’s drop in the bitcoin market confirmed a brief negative correlation with the US Dollar on a lower time frame.
However, on the weekly chart, two assets continue to reverse trend To a second, by reminding that Musk, with his $1.3 billion BTC exposure in a $690 billion market, remains irrelevant against much broader macroeconomic concerns, including inflation.
Elon Musk is a phase
Tesla continues to struggle to generate income from sales of its electric vehicles, shows the company’s first-quarter filing. Of the reported $594 million, only less than $100 million came from its actual business – on the other hand, came through the sale of its profitable BTC holdings (~272 million) and regulatory credits.
In short, Musk’s bitcoin game is similar to that of a retail trader.
The billionaire entrepreneur has so far regarded cryptocurrency as a tool to offset the poor performance of his company.
This is even more apparent with his flip-flop moves to accept BTC as payment, followed by tweets that may have caused Tesla to dump his entire bitcoin holdings, leading to their breakup. The meme is done – which coincidentally comes on the same day that the global media reported 50. % decline in sales of Tesla cars in China due to quality issues.
— Reuters (@Reuters) 3 June 2021
But Musk’s influence on the bitcoin market is waning with each of his anti-crypto tweets, proving the scale of the cryptocurrency’s decline. For example, their mid-May Twitter controversy The BTC/USD exchange rate dropped from $58,000 to $30,000 with crypto influencers – a drop of almost 42%. But still, the pair later overcame about 30% of those losses.
In comparison, the latest Elon Musk candle just wiped $3,500 off bitcoin’s valuation, causing an intraday loss of around 9%.
Attributing this dump to Elon is a denial that there was no break out volume and could not break the 39.5k resistance. Price was falling when he tweeted maybe after breaking 3 times
— ff myohanen (@myohaanen) 4 June 2021
Therefore, bitcoin continues to trade in an uptrend for a long time, driven by the same anti-dollar fundamentals that attracted companies like Tesla in the first place. More bullish signs for the cryptocurrency are expected from President Joe Biden’s $6 trillion government spending package that will put further pressure on the US dollar.
Biden’s comprehensive debt plan and the Fed’s monetization could actually damage the US dollar reserve position.https://t.co/S7dFgOvYFY
— Daniel Lacalle (@dlacalle_IA) May 29, 2021
For now, the cryptocurrency is in a technical limbo, waiting for a decisive step Out of the current $32,000-$40,000 range. Musk is old news. Go ahead, bitcoiners.
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