Bitcoin started the year around $30,000, and now the level acts as support. The euphoria surrounding the cryptocurrency market ended with a 50% decline in the price of Bitcoin and, in some cases, with more.
In the first quarter of the year, Tesla announced that it invested $1.5 billion into Bitcoin. Moreover, it said that it would accept payments for its vehicles in Bitcoin.
The announcement led to massive buying into the crypto space as numerous altcoins entered the bullish territory. As such, Bitcoin rose from $30,000 to over $60,000.
Investors viewed Tesla’s announcement as a sign of further adoption of the cryptocurrencies, thus the bullish run. However, a couple of months later, Tesla announced it had sold some of its Bitcoin holdings and booked a profit just before the end of the first quarter. In fact, the company made a profit on the quarter only from selling carbon credits and some of its Bitcoin holding.
Shortly after the second quarter started, Tesla, through the voice of its CEO, Elon Musk, expressed its concerns about the energy use of mining Bitcoin. As such, it stopped accepting Bitcoin as payment for Tesla cars, but it is unclear if the company sold any of its remaining Bitcoin.
Tesla Q2 Earnings – Key for Future Price Action in Bitcoin
It is unclear if Tesla sold any of its remaining Bitcoin or not, but investors will find out pretty soon. The Q2 2021 earnings season starts now, and investors will look for clues about the company’s crypt holding. If Tesla sold more of its Bitcoin at the higher levels, the bias is that the market will test below $30,000.
From a technical perspective, the market seems to have formed a head and shoulders pattern. Even the fact that the global Bitcoin mining energy use is comparatively negligible does not matter anymore, as the market is unable to bounce.
Moreover, further investments from companies such as MicroStrategy, which announced over $1.5 billion invested in Bitcoin in the second quarter alone, were not enough to lift the price of Bitcoin.
To sum up, if there is one critical event for Bitcoin in the weeks ahead, it is the Tesla Q2 2021 earnings. Any changes in the company’s crypto portfolio may move the market.