Tesla share price has underperformed in 2021, as seen in the chart below. It peaked at $900 and consolidated in a major triangular pattern ever since, bouncing from the $550 area twice so far.
However, the pattern is bearish as the triangle appears to act as a reversal pattern. Once horizontal support gives way, the measured move suggests more weakness toward the $250 level.
Over the weekend, the Miami Bitcoin conference brought the world’s attention to the cryptocurrency market. It is not clear if Tesla still holds on its Bitcoin investment or it has sold its coins, as Musk’s tweets may be interpreted both ways. In any case, Bitcoin and Tesla remain two correlated financial assets, trading with a bearish tone.
From a technical perspective, the triangle’s measured move suggests more weakness toward the $250 level, once the horizontal support is broken. On the flip side, only a move above $750 shifts the bearish sentiment.
Bears may want to wait for the Tesla share price to break and close below $550 on the daily timeframe. Such a move should trigger more weakness. By going short, bears need a stop at $650 and a take profit around the $300 level or beyond.
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