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Bitcoin Drops After Musk Tweets of Breakup

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Bitcoin fell Friday after Tesla CEO Elon Musk put out a cryptic tweet hinting at a breakup with the largest cryptocurrency.

  • Musk tweeted a broken heart with the bitcoin logo and a picture showing a couple in the midst of a breakup during the Asian hours.

  • The crypto community took it as a sign of the billionaire distancing himself from bitcoin, leading to price losses.

  • Bitcoin fell nearly 7%, hitting lows under $36,500 and reversing Thursday’s rally to $39,200. Other cryptocurrencies including ether, cardano, polkadot and dogecoin followed suit, suffering relatively bigger losses.

  • The pullback poured cold water over the optimism generated by the symmetrical-triangle breakout confirmed on Thursday.

  • “The failed breakout is not a good sign,” Delta Exchange CEO Pankaj Balani said. “We could see deeper losses if the recent range is breached to the downside.”

  • Bitcoin is currently down more than 40% from the record-high $64,801 reached on April 14.

  • The cryptocurrency fell by 35% last month after Tesla delisted bitcoin as means of payment, citing environmental concerns. The move quashed hopes for widespread corporate adoption.

  • Musk’s latest tweet may further amplify those fears.

  • Data provided by Skew shows the options market is biased bearish, with long put trades accounting for 29% of the flows seen today and short call trades accounting for 30%.

  • Investors typically buy puts and sell calls when the market is expected to drop.

Also read: Bitcoin’s Bull Market ‘May Have Come to an End,’ Says MRB Partners 

Correction (Jun. 4, 2021 15:03 UTC): Bitcoin is down more than 40% from its all-time highs reached on April 14, not 70% as mistakenly written in an earlier version.

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