Is Bitcoin (BTC) Bottoming Close After Tesla’s Apex Crypto Sale?
Bitcoin and Ethereum traded flat but Dogecoin rose as the global cryptocurrency market capitalization fell 0.9% to $1 trillion at press time.
| Coin | 24 hours a day | 7 days | Price |
|---|---|---|---|
| Bitcoin BTC/USD | 0.07% | 15% | $23,314.57 |
| Ethereum ETH/USD | -0.12% | 37.4% | $1,529.80 |
| Dogecoin DOGE/USD | 2.6% | 13.5% | $0.07 |
| Cryptocurrency | 24-hour % change (+/-) | Price |
|---|---|---|
| Lido DAO (I DO) | +5.75% | $1.59 |
| Monero (XMR) | +2.9% | $151.44 |
| Dogecoin (DOGE) | +2.6% | $0.07 |
See also: Best Crypto Debit Card
Why it matters: The two major coins showed weakness on Wednesday night along with stocks, which closed higher intraday but lost steam after hours.
S&P 500 and Nasdaq futures were down 0.3% each at press time as investors digested a flurry of earnings. For the day, the S&P 500 closed 0.6% higher, while the tech-heavy Nasdaq shot up 1.6%.
Macroeconomic headwinds continue to blow against Bitcoin, but ‘peak pessimism’ is close to being priced in, OANDA senior market analyst said Edward Moya.
“Risk remains high, but now Bitcoin is at the $24,000 level and the selling pressure seems to be throwing in the towel for now,” Moya said on Tuesday in a note, seen by Benzinga.
In a results reportElon Musk-led car manufacturer Tesla Inc TSLA said it had sold 75% of its Bitcoin holdings and netted $963 million from the sale. Last year, it bought $1.5 billion of the apex coin.
Michael van de Poppe said on Twitter that Tesla’s sales were one of the contributors to the recent Bitcoin crash. He said this is also “the reason why we are near the bottom.”
So, not just forced sales from 3AC, $LUNA & $USTbut also Voyager, BlockFi and Celsius have caused the markets to crash.
On top of that, Tesla sold 75% of its #Bitcoin purchase for cash.
That’s what caused the crash.
That is also why we are near the bottom.
— Michaël van de Poppe (@CryptoMichNL) 20 July 2022
In a separate tweet, the cryptocurrency trader noted that without revenue from Bitcoin, Tesla’s cash flow would “likely go negative.”
In the official cash flow statements and profit and loss.
Earnings were partly pushed further upwards from $TSLA because of the earnings from #Bitcoin.
This means their cash flow would likely be negative without earnings $BTC. pic.twitter.com/yo1HXw8VbB
— Michaël van de Poppe (@CryptoMichNL) 20 July 2022
Co-dealer Justin Bennett warned investors that markets look “a bit top-heavy.” He said: “Maybe a flush of late yearnings here. Be careful.”
The markets look a bit top-heavy.
Maybe a flush of late longs here. Be careful.
— Justin Bennett (@JustinBennettFX) 20 July 2022
Chartist Ali Martinez said that Tom Demark (TD) Sequential, a tool that can help spot the exact timing of trend exhaustion and price reversal, indicates a “sell signal” on Bitcoin on its four-hour chart.
“A sustained four-hour candlestick near below $23,600 could trigger a correction for [BTC] to $22,500 or even $21,670.”
Approach #Bitcoin with care!
TD Sequential presents a sell signal on $BTC four hour chart. A sustained four-hour candlestick close below $23,600 could trigger a correction for #BTC to $22,500 or even $21,670. pic.twitter.com/INZKFAeJJm
— Ali Martinez (@ali_charts) 20 July 2022
Meanwhile, profit-booking has been more robust in Ethereum than in Bitcoin, as the two assets diverged recently. Ethereum has seen far more signs of profit taking. The ratio of transactions in profit vs. losses paint two very different pictures for the top market caps i [cryptocurrencies]Santiment, a market intelligence platform, tweeted.
Both #Bitcoin and #Ethereum have had a great rebound month here in July, but $ETH have seen far more signs of profit taking. The ratio of transactions in profit vs. losses paint two very different pictures for the top market caps i #crypto. pic.twitter.com/fGHizkLmFk
— Santiment (@santimentfeed) 20 July 2022
Read next: Michael Saylor comments on Tesla’s Bitcoin sales: How much did Tesla really sell?
