Tesla reports that it has sold Bitcoin over liquidity issues; plus our weekly BTC and ETH analysis
- Tesla Sells $936 Million Worth of Bitcoin
- Bitcoin/USD – BTC Range Deviation?
Tesla Sells $936 Million Worth of Bitcoin
Last week, Electric car maker, Tesla (TSLA) announced that it had sold $936 Million dollars worth of Bitcoin, which was also about 75 percent of its bitcoin holdings. CEO Elon Musk announced during an earnings call that Tesla sold the majority of its BTC holdings because it was concerned about the overall liquidity of the company, and felt the need to maximize its cash position due to the uncertainty of the covid lockdowns in China. Last year, Tesla made a $1.5 Billion dollar investment in Bitcoin and then announced that it would accept payments in Bitcoin. While the company didn’t say at what price it sold, Bitcoin was close to $46k at the beginning of the 2nd quarter and ended below $19k. In the latest report, Tesla claims that the remaining value of its digital assets only amounts to $218 million. Tesla’s stock is also down over 30 percent so far this year, in part due to Musk’s bid to buy Twitter for $44 Billion, and then later backing out of the deal. During an investor call, Musk addressed the crypto selloff and reassured everyone that he is still a huge advocate for cryptocurrency, stating that the Tesla sell off “should not be taken as some verdict on Bitcoin.” Musk also added that Tesla would be open to increasing its crypto holdings in the future.
Bitcoin/USD – BTC Range Deviation?
BTC Daily Chart
BTC Weekly Chart
At the time of writing, Bitcoin is priced at about $21.7k and has closed back within the old range which it previously broke out of after about 30 days of consolidating within the range. In last week’s article, price was trading over the weekly 200MA but that ultimately turned out to be the wick action of the candle. A weekly close above the 200MA or a daily reclaim/close over the range would lead me to believe prices would go higher, but until one of those two outcomes come to fruition, I believe price will travel back to at least the range support.
Bitcoin Bull Scenario
Bitcoin reclaims previous range and/or gives a weekly close above the 200 weekly moving average
Bitcoin Bear Scenario
Bitcoin does not reclaim either the range high or the 200 weekly moving average and I would assume prices go lower.
ETH Daily Chart
ETH Weekly Chart
At the time of writing, Ethereum is priced at $1411, almost exactly at its 2017 ATH. Although ETH seems strong, it seems that it is still at the mercy of Bitcoin’s price action. While BTC has broken its range and retested/went below its old range high, ETH has not yet retested its previous range resistance now turned support. If BTC were to fail, the first level of interest would be the range high in my opinion. A look at the weekly timeframe and there is also a nice confluence of levels with the range high and the weekly 200MA which has not yet been retested as support.
Ethereum Bull Scenario
Ethereum maintains the range/weekly 200MA support level on a weekly closing basis and a move to $1800 is in the cards.
Ethereum Bear Scenario
If Ethereum loses its weekly 200MA/range high level, I believe lower prices follow.