Elon Musk is having a bad year, and it may be about to get worse. The Tesla share price closed below a key indicator, signaling more selling may be ahead.
I have been talking about the negative prospects for Tesla’s (TSLA) stock for a few weeks. Bearish indicators have been building lately. Nonetheless, I had no idea that it would be a tweet own Bitcoin that accelerated the move lower.
CEO Elon Much managed to alienate many prospective Tesla customers when he released his infamous tweet on the environmental impact of Bitcoin.
In the U.S alone there are a reported 21 Million holders of Bitcoin with a projected 100 Million plus worldwide. Many of whom would have been deeply upset with the value wrecking tweet.
The Tesla share price has dropped sharply in the aftermath and has now broken below the 200-Day Moving Average at $583.56.
Now that the price has crossed below this threshold it is in a long term downtrend.
Tesla share price Outlook
The last time the stock closed below the 200-day MA was way back in March 2020 and during the darkest days of the global meltdown. The next day the price was back above it, and the stock returned +1180% in the 10 months that followed.
The price is -36% from its January high and back to the key 200-Day Moving Average. What comes next is the question.
To stop an immediate, steep decline, the stock will need to recover and hold above the indicator today. This would signal that buyers have taken advantage of the recent price decline.
However, a lower close today, and there is a real possibility that the Tesla share price could drop to support at September 2020 high, just above $500.
Traders should wait until today’s candle is formed, as this is likely to tell us the direction of the Tesla share price in the future.