- Ethereum fell below the $4,000 level dropping to two-week lows as Elon Musk rattled the market.
- Bitcoin fell by more than 10% to three-month lows as Elon Musk hinted Tesla might offload its BTC holdings.
- Dogecoin is trying to bounce back after a 30% plus sell-off the past week.
Cryptocurrencies were on the receiving end at the start of the week as Elon Musk’s tweets continued to rattle sentiments. Bitcoin crashed to its lowest level since February as Ethereum tumbled to two-week lows as Musk reiterated Tesla could sell its holdings in the flagship cryptocurrency.
Amid the steep pullbacks registered by Ethereum and bitcoin against the dollar, the ETH/BTC ratio continues to flirt with two-year highs. The spike to two-year highs underscores continued Ethereum strength and performance against Bitcoin.
ETH/USD sell-off from record highs of $4,300 persisted at the start of the week, with the pair touching session lows of $3,121. The sell-off came as Elon Musk sent jitters with a tweet that once again aroused concerns about Tesla’s Bitcoin holding.
As of writing, the pair had recouped some of the losses bouncing to the $3,500 level. The $3,600 level is the immediate resistance level standing in the way of bulls pushing the pair higher and into feeling a gap that opened at the start of the week.
A rally followed by a close above the $3,600 level could pave the way for bulls to push the pair to the $3,900 level ahead of the $4,400 level seen as a psychological resistance level.
While Bitcoin is up by more than 50% for the year, Ethereum is up by more than 300% and continues to trade in a steep uptrend amid the recent correction.
Bitcoin Declining Dominance
Bitcoin dominance of the cryptocurrency market has been declining in recent weeks as the focus shifts to other altcoins such as Ethereum and Dogecoin. The flagship crypto now represents 40.3% of the combined crypto asset market capitalization, the lowest since June of 2018. Bitcoin market share hit the lowest level of 33% in January of 2018.
Bitcoin market value has been seesawing in recent weeks as traders in the market react to tweets by Tesla CEO Elon Musk. BTC price fell by as much as 10% as the crypto enthusiasts appeared to suggest that the EV giant is planning to dump its BTC from the balance sheet. A simple response, “Indeed,” rattled the market, triggering a sell-off that saw BTC/USD tumble to three-month lows of $42,144 levels.
The 10% sell-off came following a similar sell-off last week triggered by Musk stating Tesla will no longer accept bitcoin payments for EV cars. BTC has since bounced back on Musk, reiterating that Tesla is yet to sell its Bitcoin holdings
While BTC/USD has bounced off the $42,000 level to the $45,000 level, it remains susceptible to further drops.
The pair needs to rally and find support above the $50,000 mark to continue edging higher. Bitcoin performance will also depend on how traders react to the plethora of tweets by Elon Musk that weighs heavily on the crypto sentiments.
Dogecoin is another cryptocurrency that continues to feel the impact of Musk’s rhetoric. After a 30% plus slump last week, the meme crypto is again down by about 5%. After bouncing to the $0.50 level, DOGE/USD is trading above key support at $0.46.
A sell-off followed by a close below the $0.46 level could result in the pair edging lower, probably back to the $0.38 level. Similarly, the pair needs to rise and close above the $0.56 level to turn bullish and continue powering high.