A tweet from Elon Musk suggesting he has finally ended his on/off relationship with the cryptocurrency has sent the Bitcoin price sharply lower.
Once again, BTC/USD has failed to break above $40,000. Yesterday the signs were encouraging. Bitcoin had gained +18% to $39,490 after rallying in 4 of the last 5 days. A final push today looked certain to lift the Bitcoin price above the psychological barrier and to its highest close since the 19th of May.
However, Elon Musk, the arch-nemesis of bitcoin bulls, was on hand to spoil the party. The tweet, which depicts a couple breaking up, was accompanied by a Bitcoin hashtag and a broken-heart emoji.
The tweet, which referenced a Linkin Park song, was actually quite funny, just not for BTC/USD longs. The Bitcoin price has so far lost -$2,700 in one-way traffic and in danger of losing even more.
BTC/USD Price Outlook
Looking at the 2-Hour chart, we can see yesterday’s rally caused the Bitcoin price to break out of its narrowing triangle formation. The trading range had decreased since the 19th of May crash (also triggered by an Elon Musk Tweet).
This technical breakout came as the price crossed higher through the trend at $38,300. This suggested BTC/USD could extend higher to the resistance of the 200 DMA at $41,500.
Therefore it’s likely that buyers chased the price higher on the break of the trend. The reversal back through the trend may have resulted in those short-term longs being stopped out, contributing to the pace of decline.
If the selling continues in the U.S session, the Bitcoin price may well return to the lower end of the triangle pattern at $34,850. A failure to hold this support would then target the April 30th low at $33,300.
However, If BTC/USD can recover the trend at $38,300, the negative outlook would once again flip to bullish.