Has Bitcoin Been Impacted By Tesla's Announcement?

Has Bitcoin been impacted by Tesla's announcement? A key trendline that the Bitcoin price crossed for the first time in over a month is currently experiencing its first test as support.

Resistance becomes support

Bitcoin made its first test on its new support on July 21, at the same time the market learned of the news that Tesla had liquidated most of its bitcoin holdings.

Data from Cointelegraph Markets Pro and TradingView showed the BTC/USD pair battling the $22,800 zone after falling from its multi-week high of $24,280.

The pair reacted quickly, but relatively modestly, to Tesla's revelation that its bitcoin position was reduced by 75%, or nearly $936 million, in the second quarter.

Comments from CEO Elon Musk, who avoided direct criticism of the biggest cryptocurrency, appeared to help limit the damage. During the company's earnings conference call, he emphasized that this selloff " should not be taken as a verdict on Bitcoin."

The move nonetheless ended several days of sustained bullishness, with BTC/USD rising along with the traditional equity market as US dollar strength tumbled from 20-year highs. $22,800 marks the 200-week moving average for BTC, a historically significant trendline lost as support in June and only broken higher in recent days.

Caution is in order for Bitcoin

For on-chain indicators, the immediate outlook is mixed. While the daily UTs were expressing weakness, the data still points to a broad recovery continuing on the monthly chart.

“This could mean that a retest of the 50-day moving average will occur in the near future, but also that we may not have seen the monthly top. Ignore the noise and watch the graphics,” according to this Twitter watcher.

The 50-day moving average was almost in the same place as the 200-week moving average today. Other analysts have meanwhile shown how Tesla dumped its BTC in mid-June.

Last month, over a period of several days, inflows into the stock markets peaked, with more than 63,000 BTC being released by market makers (MM).

According to data from analytics firm Glassnode, the news of the selloff has yet to be reflected in any significant upheaval in exchange balances by panicked sellers or opportunistic buyers.

We will watch the next few days carefully to see if Bitcoin manages to maintain this new key support and maintain an uptrend in the short to medium term.