The Bitcoin price was given a welcome boost by the news that Tesla has sold just 10% of its holdings. Can BTC now recover the elusive $40k level?
BTC is last trading at $38,946 +$3,156 (+8.82%)
Over the last 2 months, the Bitcoin price has had several outsized and mostly negative reactions following tweets from Elon Musk. So much so that the Wall street journal recently labeled him ‘Bitcoin’s biggest influencer.’
The Bitcoin community has been openly critical of Musk’s social media barbs. However, an accusation of price manipulation was enough to draw a response from the Tesla supremo.
The response brought some clarity to what has been a much-debated subject.
Musk confirmed that Tesla still owns 90% of the BTC it bought earlier this year. Moreover, the bulls will cheer that Tesla has not ruled out resuming Bitcoin transactions in the future.
On the daily chart, we can see the Bitcoin price has broken above a descending trend line at $37,700.
The trend from the 26th of May had been a robust level of resistance and can now be considered support.
Clearly, this is a positive development for BTC, but the real test will be if the price can climb above $40,000. Even the supportive news that El-Salvador has made BTC legal tender only got the price as high as $39,640.
Assuming BTC clears the $40k mark, it will face the 200-day moving average at $42,509. In my opinion, only a close above this threshold would indicate the Bitcoin price has recovered from the damage done in May.
Additionally, if BTC fails to hold today’s gains and drops below the trend line at $37,700, it would be a very negative sign. In this instance, BTC would target the lower end of its recent range, around $31,000.
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