Bitcoin prices experienced some notable volatility today, dropping below $50,000 following a highly visible tweet from Elon Musk and then recovering.
The digital currency plunged more than 15% between roughly 6 and 8 p.m. EDT, reaching $46,294.72, according to CoinDesk data.
This downward movement coincided with a tweet posted by Musk at 6:06 p.m. EDT, in which he announced that Tesla, Inc. would stop accepting bitcoin as payment for the company’s vehicles.
Explaining this decision, Musk emphasized environmental concerns, stating that while cryptocurrencies hold great potential, the impact they have on the planet cannot be overlooked.[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
While bitcoin fell to nearly $46,000, it enjoyed a prompt recovery, rising above $50,000 within an hour of hitting its intraday low, additional CoinDesk figures reveal.
Since then, it has been fluctuating within a reasonably tight range between $49,000 and $51,000.
Kiana Danial, CEO of Invest Diva, weighed in on the situation, leveraging technical analysis to help offer a sense of what bitcoin prices might do going forward.
“BTC/USD has broken below the daily Ichimoku cloud and completed a double top bearish reversal chart pattern, confirming our medium-term bearish outlook,” she stated.
“Support levels fall on key Fibonacci retracement levels tracing the gains from January 2021 to the highs of April, at $45,900 and $42,000 respectively,” said Danial.
“Right now it’s basically going to be a battle between the panic-sellers and the ‘buy the dippers,’” she stated. “Whichever side is stronger will win the battle.”
John Iadeluca, founder & CEO of multi-strategy fund Banz Capital, also provided some technical analysis on the world’s most prominent digital currency.
“Bitcoin prices will continue to test the $50,000 support level in the coming days and weeks based on current selling pressure,” he stated.
Iadeluca added that should the digital asset break through the $50,000 level, it will establish new support at the psychologically important level of $45,000.
William Noble, the chief technical analyst of research platform Token Metrics, also weighed in, stating that:
“I am looking at both price and time together, using the work of William Gann. If BTC hovers near $49k between May 12 and May 15, that could actually produce a good rally into the end of June.”
“If BTC broke above $59k near Memorial Day that event would be big enough to target $130k and $5T market cap for the crypto space,” he stated.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.