Bitcoin Bears Erase the “Elon Musk” Candle as Sellers Take Control

• Bitcoin has witnessed some massive selling pressure throughout the past day that has erased all the gains that came about as a result of the “Elon Musk” pump a few days ago
• The selling pressure seen has come from a combination of spot and derivatives, with investors generally going risk-off
• It remains unclear what the cause of this could be, but it may be a combination of technical weakness as well as turbulence within the traditional market
• One analyst is now noting that there’s a strong possibility further downside is imminent for the entire market
• He is pointing to the cryptocurrency’s January low as the next level he is closely watching, with a bounce here potentially allowing for massive upside

Bitcoin has seen some wild price action over the past few days. It all started with Elon Musk’s endorsement of BTC, which catalyzed a massive pump towards $40,000 that has been entirely erased over the past few days.

This “FOMO” induced pump seemed to provide exit liquidity for holders looking to get out, as it was aggressively sold into.

One trader believes that this is a sign of imminent downside, as he is now pointing to the cryptocurrency’s January low as a near-term target.

Bitcoin Plunges as Bears Erase the Entire “Elon Candle” 

Earlier this week, Elon Musk changed his Twitter bio to “#Bitcoin” and commented that the change was inevitable in hindsight.

This caused Bitcoin to soar nearly $7,000 and caused nearly half a billion in short liquidations.

However, the selling pressure at these highs was significant and caused a massive rejection that has since resulted in it erasing all of the gains that came about due to Musk’s endorsement.

BTC Could Soon target Move to January Lows

One trader believes that a move to Bitcoin’s January lows could be in the cards, especially considering the multiple rejections it has posted at a key trendline.

“Bears have a clear invalidation from here imo. Easy to flip long if wrong,” he gravely noted while pointing to the below chart.

Image Courtesy of TraderSZ. Source: BTCUSD on TradingView.

Despite this sentiment, there seems to be a strong institutional bid around $30,000, as the crypto bounces just about every time this level is tapped.

As such, holding above $30,000 could provide Bitcoin with room for significantly further upside in the days and weeks ahead.

Featured image from Unsplash.
Charts from TradingView.