The corrective movement that began on Monday in the cryptocurrency market has led bitcoin to plummet by about 12% this Tuesday when the most traded of the cryptocurrencies has lost $ 50,000, a level that it struggles to recover after a new verbal intervention by the founder of Tesla, Elon Musk. The tycoon who instigated the rally of Satoshi Nakamoto's creation to a milestone above $ 58,000 on Sunday, has once again been the catalyst for broad profit-taking that has also dragged other cryptos like Ethereum down close to the 13% up to $ 1,600.
In a recent tweet, the founder of the electric vehicle company noted that the prices for Satoshi Nakamoto's creation "seem high", after calling them a "less silly" version of cash. "This seems to have been taken by some as a signal to make cash," says Craig Erlam, an analyst at Oanda. "Musk has seen his influence grow in the crypto space and Tesla's position has only increased it in recent weeks. Speculators are clearly on his every word."
An email saying you have gold is not the same as having gold. You might as well have crypto.
— Elon Musk (@elonmusk) February 20, 2021
Money is just data that allows us to avoid the inconvenience of barter.
That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.
The cryptocurrency has risen more than 90% since the beginning of January, as it started the year below $ 30,000, however, bitcoin has a history of strong price swings and has fallen sharply on several occasions since its inception in 2009. Without going any further, last month, when it broke the $ 40,000 barrier at the beginning of January, it triggered a downward trend that took it down to $ 30,000 at the end of the month.
"The recent history of bitcoin shows us that each time a new upward cycle begins, it enters a parabolic movement that lasts a year and then correct / drain the increases for a period that lasts two years," he says. “In this period, the price corrects about 80% of the previous rise and then a new 'halving' arrives and from there, little by little, a new upward cycle is built. The current upward cycle would still be far from being reached and therefore the possibilities for bitcoin are many ”, he concludes.
The rest of the market has not been immune to the decline and its total value has fallen to 1.5 trillion dollars, from the high of 1.7 trillion on Sunday. Bitcoin's capitalization has fallen below the trillion-dollar mark that it conquered last Friday. Traders have also retracted Ethereum, which had touched $ 2,000 this weekend and is now correcting about 13% as it tries to hold $ 1,600. As for the other most traded 'altcoins', they leave setbacks of over 10% in Litecoin or bitcoin cash.
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