$39,000 may seem unfairly cheap for Bitcoin, but there is likely more keeping it there than just Elon Musk.
Bitcoin (BTC) has hit its lowest price since Feb. 8 and is struggling to maintain $40,000 — but is Elon Musk wholly to blame?
Cointelegraph takes a look at other factors working against Bitcoin bulls this week as the market returns to levels that some thought would never appear again.
USD bounces off multi-month lows
Tesla CEO Elon Musk bashing Bitcoin’s energy consumption is the narrative of the moment everywhere, but some classic hurdles to fresh price gains are also back this week.
Among them is the strength of the United States dollar, which is attempting to stage something of a comeback after a losing streak that began in late March.
At the time of writing, the U.S. dollar currency index (DXY), which measures the USD against a basket of trading partner currencies, had bounced off long-term support to reverse its downtrend.
DXY is traditionally inversely correlated with Bitcoin, and together with limp stocks, the conditions are right for tripping up bulls’ progress.
Nonetheless, Wednesday’s DXY close was its lowest since Jan. 6.
Tech stocks see trouble
Elsewhere in the macro picture, tech stocks are suffering — and that’s also something that tends not to bode well for Bitcoin.
Following a curious report by Reuters about China allegedly banning further aspects of cryptocurrency commerce, stocks began to come under pressure.
As Cointelegraph and many others noted, however, nothing new has come from Beijing, and trade associations have sought only to reiterate existing restrictions.
Among the equity losers, however, was MicroStrategy, the corporate Bitcoin whale, which lost 5.2% on the day.
The rout also afflicted Tesla in a somewhat ironic postlude to Musk’s Bitcoin criticism. In addition to being relegated to the world’s third-richest man, Musk has presided over Tesla’s BTC gains almost entirely disappearing.
There may be light at the end of the tunnel. A curious tradition shows that after a China scare, crypto markets tend to produce huge rallies.
When the country officially halted crypto trading in September 2017, Bitcoin and altcoins promptly shot to then all-time highs.
Copycat moves by other jurisdictions are likewise known for their lack of bite. These include Donald Trump’s criticism from 2019 and India’s ban from earlier this year — something that is already being reconsidered.
“Figure out a way to participate in buying the dip. However you can,” author Jason Williams told Twitter followers.
“I’ve seen this play out before with Bitcoin so many times. Price down, news media piles on. FUD. Price down further. Then [lift off].”
Exchange inflows, which in the past 24 hours reached their highest since the March 2020 crash, captured the fear among traders.
“People are scared,” analyst Lex Moskovski commented on the data.