What do the charts say about BTC? Also how relevant is Elon Musk
After giving hopes yet again of a shot at $75,000, Bitcoin saw a correction and is now trading around $50k level. I know, it is painstaking to watch, if you are a HODLer such as I.
The chart of Bitcoin shows that a Head and Shoulder pattern top may form if the price goes below the white trendline. The pattern formation is not yet complete so we have little to worry about. In case the price falls further because Elon Musk says he is thinking of selling bitcoin, then we may see a fall to levels around 33k.
The price is also trading below its 50 day moving average and major support of 200 day moving average is around $40k. A fall to that level may cause a 33% correction (considered from $60k) - nothing unusual about how Bitcoin trades.
RSI on the other hand, is in no man's land. A test of the RSI to 30 level may also bring Bitcoin into oversold territory and would be healthy in my opinion.
I don't think that $33k is a possibility. However, I do think that the RSI level may be tested and Bitcoin may drop to around $45k before continuing its move up. Long term I do think that $100k will be crossed this year and that won't mark the top for this bull run.
Now for Elon Musk and his tweet.
I do not know how many Teslas were purchased using Bitcoin. My guess is probably 0, and if not 0 then less than 10. Elon Musk can stay concerned about how much energy is consumed by Bitcoin mining but purchases of Tesla cars isn't a big demand boost for Bitcoin. In fact, I doubt it will ever be. There is no point in questioning the ethics of a billionaire flying in a private jet talking about his concern for the environment. It is all futile. The important thing is the company isn't selling any BTC and even if they did, Bitcoin has to mature as a market where a few thousand bitcoin sold in one shot can be absorbed by the market. An action like that only helps make BTC stronger. Good that they are looking for other cryptocurrencies. They have about 2000 that they can buy, many proof of stake. However, not a single one is Bitcoin. Also, good luck going down the risk curve with the majority of the company's cash. For a cash-burning company, that sounds like a brilliant idea. Additionally, I don't think Tesla cars should be bought. After all, most of the battery charging is done by coal-powered energy.
