Bitcoin Market Looking for New Lows After Elon Musk’s Pump & Dump
While the endorsement from Tesla CEO and Bridgewater Associates founder is “bullish” for the leading crypto, Ray Dalio says the idea of “a church that one is devoted to determining one’s investment position on Bitcoin” is discomforting.
Bitcoin had a wild Friday as we pumped and dumped beautifully.
What looked like a change of Bitcoin market trajectory turned out to be nothing more than a short-lived pump.
This pump was propelled by the world’s richest person, Tesla CEO Elon Musk, who changed his bio to “bitcoin” that followed up with “In retrospect, it was inevitable.” This tweet was also put in block 668197 mined by yhc5t3.
It turned out to be just like the Xi pump back in October 2019 when Chinese President Xi Jinping’s call for China to accelerate the development of blockchain technology sent BTC above $10,500.
Now, the market is expecting Bitcoin to go back to testing the lows. Already Bitcoin is down more than 7% and dropped under $33,000. Trader Benjamin Blunts is calling for the incoming of new lows at “sub 28k.”
Not looking great for $BTC atm.
It needs to reclaim and stay above the yellow trendline for the bullish continuation.
Else yesterday's move is a fakeout and new local lows are coming. pic.twitter.com/hPvzFZJ2AF
— Squeeze (@cryptoSqueeze) January 30, 2021
Besides this short-lived pump, Musk taking Twitter CEO Jack Dorsey’s route also resulted in others doing the same. These individuals include Reddit founder Alexis Ohanian who is also busy “staking sats,” Anthony Scaramucci of SkyBridge Capital, YouTuber MrBeast, crypto exchange Gemini founder Tyler Winklevoss and other Bitcoin enthusiasts all having simply “Bitcoin” in their Twitter bio.
“Bitcoin is the signal and it's getting louder,” commented Michael Saylor, CEO of MicroStrategy on this.
Another positive momentum for Bitcoin came from Bridgewater Associates founder Ray Dalio this week, who turned positive on the cryptocurrency. Mike Novogratz called this endorsement from Musk and Dalio “bullish” for Bitcoin, stating:
“BTC is a store of value. All stores of values are belief systems. And we are getting new converts to the church at an accelerating rate. Stay long.”
However, Dalio was quick to chime in to say that he doesn't call himself “a convert to the church of an accelerating rate,” rather he would be interested in the response to his assessment of Bitcoin and knowing “what am I missing?”
Exchanges Can’t Handle the Growing Demand
While Musk tweaking his Twitter bio presented the market a pump opportunity, trading platforms couldn’t keep up with the demand they are seeing even since WallStreetBets got on the Dogecoin train and took the road to crypto space after Robinhood paused trading in some of the hot stocks on Thursday such as GME.
Robinhood also temporarily disabled the features that allowed users to buy cryptos instantly. However, the popular retail platform doesn't offer the ownership of cryptos, rather just buy and sell opportunity through IOUs.
“Due to extraordinary market conditions, we’ve temporarily turned off Instant buying power for crypto. Customers can still use settled funds to buy crypto. We’ll keep monitoring market conditions and communicating with our customers,” said a Robinhood spokeswoman.
As we reported, users then moved on to crypto exchanges but like every other time they couldn’t keep up with this much demand.
Binance said the risk of new users put its system under stress, with its CEO Changpeng Zhao noting that user sign-ups and trades jumped to a record high as well, forcing the exchange to briefly suspend withdrawals.
“We almost ran out of DOGE coin addresses,” Zhao told Bloomberg. “Our system couldn’t generate new addresses fast enough to match new users coming in. It’s crazy.”
US-based Coinbase also reported that “due to a technical issue, we are experiencing degraded service where some trades may not be able to be completed.”