Bitcoin price dropped as low as $36250, approx 6% from its day high of $39291. This drastic drop down of price dented the week’s offset in the crypto sector after routing much in May. Bitcoin dragged down after a cryptic tweet from Tesla boss Elon Musk yet hinting at another big hew in the world’s substantial, macroscale cryptocurrency.
Tesla’s substantial investment in Bitcoin and Elon Musk’s personal patronage frequently sets crypto markets on the brink with his tweets. The same happened today, and we have witnessed a substantial decrease in bitcoin value.
— Elon Musk (@elonmusk) June 4, 2021
His morning bitcoin tweet was followed by another one of a meme post, that showed a guy crying when the chart is in the read. The hidden message behind the post is showing the price momentum breaking some moving averages resembling the bitcoin price action. Does Elon Musk have that kind of connection and fan following in the Bitcoin world? The Bitcoin and crypto community has already started to bombard Elon, but it will be difficult to say what follows.
Elon’s tweet broke the bitcoin early morning. What was headed towards a breakout from current consolidation zones, headed back towards the support levels? If the ongoing downfall breaches the current support levels, it could lead to a major bearish momentum. Bitcoin retested these price levels in the past months too, during the last week of January, and managed to bounce back, from the lows of $29150 to the next high price of $58300 on March 13 this year, all came up in just 26 days, giving an upward rally of 96%.
Then price tends to trade in a certain trading zone for the next couple of months, also witnessing some of the retests of the support levels. Since the drastic downfall amid this cryptocurrency asset, Bitcoin has been struggling a lot to stay afloat. The first resistance is getting past the 200 Day Moving Average. It is an important psychological level that needs to be crossed to get into good crosshairs. Only then will Bitcoin be able to move towards a bullish trend.
A big red marubozu candle on daily charts can create a bearish engulfing pattern on this daily chart, putting traders in an ethos of getting extra circumspect. Any immediate support breach can land this crypto leader towards the $30k mark. On the contrary, an upside breakout can take bitcoin to the $40000 mark.
The current price range is still hovering near the price range seen at the starting weeks of January 2021. It can not be wrong to say, if the negative sentiment continues, Bitcoin may breach its major support levels of $30000. The rush that rallied it towards $60,000 is nowhere to be seen. Breaking the support of $30000 can land this leader towards a six-month low witnessed during December 2020. A value of $15000 – $20000 is unlikely to happen, but if the crypto world continues to be enforced by Elon’s tweets, the trend can continue for a longer duration.