A few days ago, Tesla and SpaceX founder and CEO Elon Musk caused a significant frenzy when he changed his Twitter bio to "#bitcoin" and followed up with a cryptic tweet that read, "In retrospect, it was inevitable." You can get the full story when you click here.
To fully understand, I will discuss how the Bitcoin pump and dump by Elon Musk tweets could negatively affect the increase in Bitcoin valuation.
In under a single hour, bitcoin massively rose by 12%. This is a very impressive price spike in the shortest possible time. Bitcoin got to about $32.2k but eventually declined to around $35k.
All this over a tweet and bio change?!!!
This is the power of wealth and influence on display. We all are aware of the impact the billionaire has on a global level and why something as simple as a tweet and bio change could bring about a fierce surge in the price of Bitcoin.
Many people must have speculated some great news following the tweets and bio change. People must have had thoughts and questions running through their minds.
Maybe Tesla had put bitcoin on the balance sheet, or Elon was going to invest in Bitcoin or possibly even buy a few more since we already know for a fact that he owns only about 0.25 BTC.
Hours passed, and speculations lacked justifications. Elon failed to upload any follow-up tweet or state any news that could have suggested anything significant. I think Elon must have trolled the public, seeing as this has happened before.
Although this was good for bitcoin holders and investors, I think the decline in price after the spike showed something essential. There was a massive dump after the initial pump, and I will explain with the illustrated graph below;
If you look closely at the plunge's relationship with the previous peak, you can see that the Bitcoin price has declined so much that it broke through from the resistance point. This made the dump appear bearish for the market. I will illustrate below;
This could only mean that bitcoin may be in danger if the bulls don't up their game. Although fortunately enough, there is a little recovery spike.
Feel free to discuss further in the comment section your thoughts on the Elon Musk pump-and-dump of Bitcoin.
