Crypto Market Analysis: 18th May 2021

The price of bitcoin has tumbled over 25% in the last seven days, hitting a low of $42,025 over the weekend, as investors took profits en masse.

Bitcoin, as well as peers such as Ethereum which have also slumped by similar amounts in the last week, has sold off after a staggering run year-to-date which had seen it double since the start of 2021.

Amid a wave of profit-taking last week, much of the reason for the sell-off is being placed on Elon Musk, the Tesla CEO, after a series of tweets about bitcoin, its energy usage, and the company’s position in the cryptoasset.

‘We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted.

‘Cryptocurrency is a good idea on many levels and we believe it has a promising future but this cannot come at great cost to the environment.

‘Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.’

Nonetheless, Musk himself seemed to counter many rumours this morning after clarifying that Tesla had not sold any of its bitcoin recently.

Having bottomed at $42,000, bitcoin bounced back to trade at $44,300 this morning, with Ethereum at $3,376 having dropped to $3,095 at its low point.

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