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Bitcoin (BTC), the most valuable cryptocurrency in the market, was on the cusp of breaching a major technical threshold last week, giving rise to fears of a literal bloodbath. However, the tweets by the CEO of Tesla (NASDAQ:TSLA), Elon Musk, over the weekend seem to have staved off this scenario for now.
While responding to scathing criticism from the CEO of Sygnia, Mr. Musk tweeted that Tesla still retained substantial Bitcoin holdings and that the company may even look to enhance this stash once specific green energy mining thresholds were met:
This is inaccurate. Tesla only sold ~10% of holdings to confirm BTC could be liquidated easily without moving market.
When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.
— Elon Musk (@elonmusk) June 13, 2021
We had noted last week that Bitcoin was nearing what is known as a death cross, which occurs when the 50-day moving average crosses the 200-day moving average from above. As moving averages act as potent psychological levels, the so-called death cross often unleashes a hefty wave of selling, thereby further depressing the price of a security. While Musk’s clarification allowed Bitcoin to bounce off session lows, the threat is not completely over. As an illustration, the 50-day moving average for Bitcoin currently stands at $44,589, while the 200-day moving average is pegged at $42,482 at present. This means that the 50-day moving average is less than 5 percent above the 200-day moving average. Readers should note that last week, the 50-day moving average was 10 percent above its larger timeframe counterpart. Consequently, any significant selling from this point onward may yet result in a death cross.
Rekt Capital also seems to think that the threat of Bitcoin breaching this major technical threshold is not imminent now:
Fantastic upside movement from #BTC lately
The $BTC breakout has pushed back the potential Death Cross by two weeks
Price increases from here would further postpone it
— Rekt Capital (@rektcapital) June 14, 2021
Of course, Bitcoin seems to be clawing back the space it had lost amid the entire furor over the energy-intensive nature of the cryptocurrency network. El Salvador recently became the first country to grant legal tender status to Bitcoin. Unsurprisingly, this move by El Salvador was welcomed by Bitcoin enthusiasts, with reports of the community coming together to donate as much as $1 billion to the struggling country in order to save it from the supposed clutches of the IMF. However, at the opposite end of the spectrum, China continues to clamp down on mining activities, with the Qinghai province becoming the latest regional authority to issue a blanket ban.