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Bitcoin, the world’s biggest cryptocurrency, has had a tough few days, with BTC slipping from $57,000 on the 11th to $39,300 at press time.
What prompted such a reversal? The overwhelming factor in everyone’s view, though, can be summed up by one man – Elon Musk. Though DOGE remains his favourite, Bitcoin seems to have fallen out of favour, with Tesla recently announcing the suspension of Bitcoin payments. Understandably, BTC plummeted in the charts as a result. Musk, on the other hand, was not done.
A few days later, the exec seemingly implied that Tesla has sold or might sell all its BTC holdings. While Musk was quick to clarify later that the company has not sold any of its Bitcoin, the damage was already done.
Bitcoin is down 20% since @ElonMusk started shitposting.
And you wonder why some people are mad? 🤔 pic.twitter.com/WDMvcptFsK
— Bitcoin Archive 🗄🚀🌔 (@BTC_Archive) May 16, 2021
Needless to say, everyone’s mad at Musk. However, what the aforementioned corrections also proved was that while developments like these have a significant short-term impact on the price performance of cryptos, the long-term bull market structure remains intact. This was the finding made by William Clemente III in a recent blog post.
Most analyses of Musk’s tweet’s effect based on market charts and the fact that exchanges saw a significant increase in inbound transactions (With transfers onto exchanges signalling assumed to be preceding a selling action most of the time). However, this is just the tip of the iceberg. What if in the long run? Has BTC’s bull run come to an end, or will it consolidate before resuming its ascent?
According to the above article, it may be the latter, with some major on-chain metrics indicating the same.
Consider this: despite the fact that funding prices have fallen below zero on Kraken, FTX, and OKEx, they have not gone negative in aggregate. The researcher claims that
“Funding rates have gone negative and marked the local bottom of every correction over the last few months.”
While not in the negative zone, press time funding rates do suggest that a bottom might finally be in. Ergo, this might just be an opportunity to buy.
The SOPR is also worth a peek. At the time of writing, the short-term holder SOPR had sunk deeply into the oversold sector, with the same dipping to levels not seen since the bull run. This discovery appeared to imply that this could be the greatest reset of the whole bull run so far.
The most recent corrections have had several comparisons with those made in September 2017. These corrections were followed by Bitcoin climbing to an all-time high of just under $20,000. As a result, there is a case to be made for the forecast that BTC can only go up from here.
Furthermore, the analyst believes that Bitcoin’s weekly RSI is approaching a central trendline that “served as support and market a reversal for the two largest corrections of the 2017 bull run.” Last week’s price candle was also discovered to be similar to the cryptocurrency’s 21-week moving average, which has long acted as help. As a result, a turnaround is likely to occur shortly.
So, sure, Bitcoin’s bull run is still alive, and no, this isn’t going to be the 90 percent price drop that some predicted. Did Musk’s tweets make a difference? Real. However, the fact that it did does not come as a disappointment. After all, Bitcoin and the broader blockchain industry is happy to jump higher as a result of Musk’s optimistic tweets. It is only natural for BTC to step in the opposite direction in the aftermath of adversarial coverage.
Bitcoin is not and can not be used as a platform for Elon Musk’s shitposting rants. And, considering its long-term strength, Bitcoin’s short-term trend is “embarrassing” since it is dictated by the whims of one guy.
The majority of the media, according to Arca’s Jeff Dorman, had a decision to make: “stick with the tried and true narrative of the past 10+ years, or to make a quick buck off of Elon Musk – they chose the latter, and these actions have consequences.”