Bitcoin reacted with a drop to the SEC’s announcement of increasing regulation. And immediately Elon Musk tried to support BTC with positive news.
Earlier in the crypto community, Musk was accused of market manipulation. There were even calls to appeal to the SEC to stop these manipulations. But now the community must be satisfied. Musk stated after a dangerous statement from SEC chairman Gary Gensler. Gensler proposed to increase the regulation of the cryptocurrency market in order to protect crypto investors.
Immediately after that, bitcoin plummeted by 10%. This probably worried Elon Musk, he posted a tweet in which he admitted that Tesla is hodling 42 thousand BTC worth more than $1.6 billion. Musk also reiterated that Tesla is ready to resume car sales for BTC. This will happen when evidence emerges that at least 50% of renewable electricity is used to mine bitcoin. Such evidence is likely to be obtained because, after mining was banned in China, this business has moved to those regions where there is an excess of electricity from hydroelectric power plants, for example, to Canada.
Tesla has endured a $23 million loss according to its second-quarter financial report due to the drop in bitcoin. Meanwhile, the balance from investments in cryptocurrency is positive. Tesla received $272 million in proceeds from the sale of BTC, and a total of $1.5 billion was spent on the purchase of cryptocurrency.
Bitcoin reacted positively to Musk’s tweet. But the growth of the coin turned out to be short-lived. BTC soared by almost 6%, from $37.73K to $39.9K, and almost immediately returned to negative dynamics and dropped to its previous level.
Analyst Lex Moskovski draws attention to the long-term holder spent output profit ratio indicator (LTH-SOPR). This indicator has reached its lowest level since the beginning of the year, that is, long-term bounce hodlers sell cryptocurrency with a minimal margin. Thus, investors are showing distrust of the bull market.
However, bulls believe that bitcoin can overcome the $42K resistance level, after which it can rise to $45K and $47K. This is indicated by analyst PlanB, who is known as the creator of the stock-to-flow price model. This model shows the demand for an asset, with its help PlanB accurately predicted the movement of the cryptocurrency market several times. PlanB now recalls that its model gives a bitcoin price of $100K by the end of 2021, and states that by the end of August, BTC could be worth at least $47K. PlanB tweets:
– #bitcoin July closing price $41,490 … it bounced from the lows, like clockwork.