- Bitcoin is up by nearly 14% in the past few hours.
- The bullish impulse was triggered after Tesla added BTC to its alternative reserve assets.
- A further increase in buying pressure could push this cryptocurrency to $50,000.
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Bitcoin made a new record high of $44,900 after Tesla disclosed a massive investment in this cryptocurrency. Though BTC has stabilized after a significant move, it entered a no-trade zone as market participants wait for a clear signal.
Bitcoin Moons on Musk Double-Take
Despite a series of tweets where Tesla and SpaceX CEO Elon Musk endorsed Dogecoin, the South African entrepreneur today placed bets elsewhere.
Musk first publicly announced his support for Bitcoin on Jan. 29, tweeting that “in retrospect, it was inevitable” after changing his Twitter bio to include one word: Bitcoin.
FOMO kicked in among crypto enthusiasts after the tweet went viral, forcing them to rush to exchanges to get a piece of BTC.
The significant spike in buying pressure resulted in a 19.60% upswing that pushed Bitcoin’s market value from a low of $32,300 to a high of $38,660 within a few hours.
As the hype around Bitcoin faded due to the lack of any significant announcements from the business magnate, prices dropped back to $32,000. The volatile movement was described within the cryptocurrency community as “Elon’s pump and dump.”
It took over a week for BTC to recover, forming a cup and handle pattern along the way. And retesting the $38,400 support level, Tesla finally disclosed its Bitcoin investment worth $1.5 billion. Bitfinex CTO, Paolo Ardoino, shared with Crypto Briefing.
“The diversification of Tesla’s investment policy into digital assets adds further momentum to Bitcoin’s rise as institutional investors are rushing towards the king of crypto. The tectonic plates of the global investment landscape have shifted. Etheruem and altcoins are also in the green while Tether tokens (USDt) make their way towards a market capitalization of $30 billion.”
The announcement caused panic buying among investors. Consequently, Bitcoin’s market value surged by nearly 14% to surpass the cup and handle’s target by $300 and reach a new all-time high of $44,900.
Now that the flagship cryptocurrency seems to have stabilized, market participants wonder where it could be headed next.
Leading Token Enters No-Trade Zone
Bitcoin is currently in price discovery mode, so its upside potential is not limited by any resistance barrier. But when considering the Fibonacci retracement level measured from Jan. 27’s low of $29,160 to the recent high of $44,900, multiple interest areas can be defined.
The most significant price range to watch based on this technical indicator lies between $44,900 and $41,500. Only a decisive 1-hour candlestick close above or below this trading pocket will determine where Bitcoin is heading next.
Another increase in buying pressure that sends BTC above the resistance could be significant enough to see it rise towards the 127.2% Fibonacci retracement level at nearly $50,000.
Nonetheless, If investors book profits at the current levels pushing Bitcoin below the 78.6% Fibonacci retracement level, another one of “Elon’s pump and dumps” may occur.
Under such circumstances, the flagship cryptocurrency might drop towards the 61.8% Fibonacci retracement level at $38,900.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
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