Why the Elon Musk deal is so important for the crypto world

In 2021, Elon Musk once again brought down the Bitcoin exchange rate. For several days, participants in the cryptocurrency market discussed the negative impact of a businessman on the fate of the most popular cryptocurrency.

Although Tesla was not the first major institutional investor to enter cryptocurrencies, Elon Musk is considered one of the supporters of Bitcoin because he has repeatedly spoken about his interest in cryptocurrencies.

Master of cryptocurrencies

Elon Musk can drive up the value of bitcoin with just one of his tweets, or just as sharply bring it down in price. The billionaire and founder of SpaceX and Tesla often writes about cryptocurrency in his microblog, which often directly affects its value. This is not surprising, given that Musk is considered one of the richest people on the planet and has about 56 million subscribers.

According to survey, nearly 40% of U.S. investors have invested at least once, based on Elon Musk's records. The audience trusts the entrepreneur who uses the image of his boyfriend from the world of billionaires.

For example, based on the article https://buidlbee.com/will-the-shiba-inu-coin-reach-10/ Elon Musk caused a surge in the purchase of Shiba Inu crypto coin. After his tweet with a photo of his new dog of the same breed, the value of this cryptocurrency rose by 75% in a very short period of time.

One of the topics that Musk pays special attention to in social networks is cryptocurrencies in general and bitcoin in particular. Last year, the businessman publicly praised this payment unit and called it a "good thing." In January, he even wrote the hashtag #bitcoin in his Twitter account bio, after which his rate rose by almost 20% in a matter of hours.

It's not just limited to social media. In early February, it became known that Musk Tesla had invested $1.5 billion in bitcoin, and also promised that it would soon begin accepting tokens as payment for electric cars. The news pushed the price of bitcoin to record highs.

Influence

Since there are many young people under the age of 35 among the owners of cryptocurrencies, this audience coincides with the main audience of Elon Musk, who is very popular among the youth. Musk has a well-built personal brand, he clearly keeps track of what topics excite his fans.

Musk is a rock star among entrepreneurs, an idol of young investors, a symbol of the American dream, a self-made man. He often opposes the world of capitalism, although he is generally well integrated into it. There are many cryptocurrency owners among his fans, so they listen to his words.

And since there are many of them, then the whole crypto world is forced to listen to Musk’s words, because one of his tweets can inflate or bring down the cryptocurrency exchange rate. As crypto traders joke now, someone trades on signals, someone prefers technical analysis, and someone trades on Elon Musk’s tweets.

What does the price depend on

The entire value of cryptocurrencies as a whole depends only on the level of trust in them. Elon Musk is a very famous and popular opinion leader. Therefore, after his statements, we see a huge increase in the value of cryptocurrencies. A lot more people began to trust digital assets in the blockchain network. If he says that he is disappointed in technology, then the rate will collapse. Many believe that this is a great way of speculation on his part.

It is impossible to predict to what extent the growth will be and whether it will be at all. But it is clear that at the moment the purchase of cryptocurrency is as risky as possible: the price was at historical highs, and even then it was clear about the beginning of the market distribution stage – after this market phase, the falling stage begins.

It is also important to note that on the daily chart, the price at the time of writing is under 100MA (an indicator showing the average price for the period, in this case, 100 days), and before that this level was already tested. This tells us that there is a high probability that the price will drop to levels closer to $40,000 and below. What we are seeing now.

Cryptocurrency market

The market is a living organism, and the cryptocurrency market is especially sensitive. And accordingly, famous people actively use their opportunity to influence him. The nerves of all market participants are always in suspense in anticipation of some event, it does not matter whether it will be a good event or a negative one, the main thing is that it should be, everyone is waiting for it. And then it depends on the big players.

If they want to buy, they make some loud statement that knocks down the price of an asset, market newcomers panic and start selling everything, the price naturally falls and large players successfully replenish their portfolio.

If the big players want to sell and make money, they release the opposite news, opinion, etc. Following them, all beginners begin to buy, the price rises and they again achieve their goals.

And in conclusion: this is the market. Just make up your investment strategy and follow it, do not succumb to any manipulation.