Bitcoin slipped 6.25% to $43,538 on Monday, May 17. The price action dropped to $42,001 below the February low of $43,000 in early Monday morning trading due to Elon Musk's one-word tweet. The downturn stalled when Musk posted a response that Tesla had not sold bitcoin since the Q1 earnings report was released. However, the rebound also stalled. The upward correction was completely wiped out during the North American session.
Bitcoin and other crypto assets continue to look unstable since Tesla confirmed that it will no longer accept Bitcoin as a method of payment.
Technical analysis trading has turned into crass tweet trading. The crowd now trades on the tweets of media personalities. Momentum and reversals are formed depending on the tone of a Musk tweet with the #Musk hashtag.
In order to temporarily halt the decline in Bitcoin, buyers need to push the price action above $48,600. An upward correction requires a bullish engulfing candlestick pattern with a daily close above $46,500.
Musk has riled investors to such an extent that cryptocurrency aficionados have come up with a new Fuck Elon Tweet (FUCKELON) token to register their contempt for his tweets that impact the digital asset market. The token has risen in price by 2,000%.
Thanks to Musk, sellers have broken through some key support levels. The technical picture has changed a lot over the past week. Everything is empty in the volume profile on the daily TF up to the $32-37,000 range. Buyers are intimidated, so sellers could crash the market at any time. If bitcoins begin to move aggressively from cold wallets to exchanges, the $23,000 level will loom. This is not a horror story, but rather the reality of a low-liquidity market. So, keep your finger on the pulse.
Bottom line: Musk tweeted bitcoin down to $42,001. Sellers have broken through key support levels and the technical picture has turned bearish. According to the volume profile on the daily TF, the $32-37,000 range is open for the bears. If bitcoins start moving aggressively from cold wallets into exchanges, the $23,000 level will loom. In order to stave off the decline in Bitcoin, buyers will need to raise the price action above $48,600.