“TSLA is down to over 30% from it's highs. It's now below its 200 day moving average, which just on a basic level, is a bearish indicator,” states Christopher Uhl, Founder & Head Trader at 10MinuteStockTrader.com, Two Time Top 100 Person in Finance and host of The How To Trade Stocks And Options Podcast. He believes that short sellers are going to start piling on to this.
Uhl continues: “Now that they've seen that the back of TSLA can be broken and it's going down, you will see more and more people selling their shares and short selling. This could spiral pretty hard for TSLA until it finds another level of support. Because right now, we're looking at an empty playing field going down on price at this point. We don't really have any support levels that we could be speaking of.”
Tesla, earlier on in the year, have made mention that they would start accepting bitcoin. But recently, Elon Musk tweeted that they probably aren't going to be taking bitcoin payments because it's really not energy efficient to mine bitcoin. This sent the price of bitcoin down to over 20% within only two days.
“The real concern here is that if one single tweet can move a financial asset 20%, this might not be the potential store of value that people are wanting it to be,” says Uhl. “You're not going to see that happen with the US dollar, the British pound, nor the Australian dollar. But with something as volatile as Crypto, this is not replacing anything anytime soon when one tweet can change it that much.”
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