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Bitcoin moves past Elon Musk’s breakup meme as BTC rebounds

Bitcoin moves past Elon Musk's breakup meme as BTC rebounds
Image by Gerd Altmann from Pixabay

Yerevan (CoinChapter.com) — Elon Musk’s cryptic breakup meme suggesting that he would have Tesla unload its remaining Bitcoin stash worth billions of dollars did little in shaking off traders’ prevailing sentiment.

True, the BTC/USD exchange rate fell immediately after Musks tweet. But more factors contributed to the decline than the billionaire entrepreneur’s crypto FUD. For starters, the pair’s downside move originated also around its short-term descending trendline resistance; it had capped Bitcoin’s earlier upside attempts. Meanwhile, a bullish day for the US dollar also played spoiler.

Read more: Bitcoin’s Loss is the US Dollar’s Gain But There’s A Catch

Heading into the weekend session, BTC/USD is already showing signs of a rebound. First, the pair jumped north of 6.5 percent after bottoming out intraday around its short-term ascending trendline support at $35,593 (data from Coinbase).

Bitcoin trades inside a symmetrical triangle structure
Bitcoin trades inside a symmetrical triangle structure. Source: BTCUSD on TradingView.com

After that, however, it again felt a pinch of selling as traders secured profits near a provable resistance — the 20-day exponential moving average (20-day EMA; the green wave). And now, it is retesting its short-term ascending trendline as support.

Bitcoin Setup

One can expect Bitcoin to stay range-bound throughout the weekend session. That said, a rebound off the lower trendline could have traders open long positions towards their intermediate upside target around the 20-day EMA and/or the primary range target near the upper trendline.

Similarly, a pullback from either the 20-day EMA and the upper trendline could mean traders considering the lower trendline as their short position target. In either case, traders would need to maintain their stop losses against the direction of their trades, so they minimize their potential losses in the event of a bias reversal.

Read more: Is Elon Musk breaking up with Bitcoin? BTC took the hint and dipped either way

On a more cautious note, the symmetrical triangle-like consolidation pattern appears during a downtrend. That traditionally hints that the price would move lower following a pattern breakout moment — by as much as the height of the previous move lower. That risks crashing Bitcoin towards $20,000, its previous all-time high until November 2020.

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Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.

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