Bitcoin (BTC), Ethereum (ETH) Back Down After Wild Weekend
Bitcoin (BTC), Ethereum (ETH), Dogecoin (Doge), Cardano (ADA) Talking Points:
- Both Bitcoin and Ethereum saw prices fall heavily this weekend after Elon Musk put the energy expenditure behind crypto mining in the spotlight last week.
- Dogecoin, which is similarly a proof-of-work coin, like Bitcoin and Ethereum remained supported above .4500. Musk continues to speak optimistically of Doge, the original creators of the coin, both of whom have offered remarks recently, not as much.
- Cardano is often looked at as an energy-efficient coin, and started the weekend with a strong rally before pulling back on Sunday.
It was another wild weekend in the crypto world, with Elon Musk as the center of attention. Musk offered a one word tweet of ‘indeed,’ in response to an accusation that he and Tesla may dump their BTC holdings; at least partially driven by the way the crypto world has reacted to last week’s news that the carmaker will stop accepting BTC as payment.
He later clarified that Tesla has not yet sold any of their Bitcoin holdings, but the cryptocurrency hasn’t yet recovered and prices pushed back to around three-month-lows. The support of note appears to be around 42,500, which is very near the 61.8% Fibonacci retracement of the January-April bullish move.
Bitcoin (BTC/USD) Four-Hour Price Chart
Ethereum Trend Stalled
Bitcoin wasn’t the only crypto currency on its back foot this weekend, as Ethereum also continued to pull back after a really strong start to the month of May. Ethereum does offer some alternative benefits to Bitcoin, namely in the anticipated move towards Ethereum 2.0 which is advertised as being more energy efficient.
In the effort of relative comparisons, a Fibonacci retracement has been applied to the January-May major move of Ethereum below. And while Bitcoin wrestles with the 61.8% retracement, Ethereum has put in a clean test and, so far, a bounce from the 38.2% retracement.
ETH/USD Daily Price Chart
Dogecoin Holds Up Above .4500
One crypto currency that held up fairly well this weekend was Dogecoin, which was originally created as a joke, and this weekend, we heard from the original duo that created the meme-coin. Jackson Palmer tweeted-and-deleted a disparaging remark towards Musk, calling him a ‘self-absorbed grifter.’
Musk continued to opine optimistically about Dogecoin, after last weekend’s SNL episode saw him say (albeit in a skit) that ‘it’s a hustle.’
There is an item of divergence here: Musk is focusing now on Dogecoin versus Bitcoin but, the very same reason that drove Tesla away from BTC is an issue with Dogecoin, as well, as it’s a proof-of-work coin that requires energy to be mined. When asked on Twitter whether this was ever a concern, the other creator of Dogecoin, Billy Markus, remarked ‘I made doge in like two hours i [sic] didn’t consider anything.”
At this point, Doge is still sitting above the .4500 area, and it does not appear as though the bullish enthusiasm in this coin is yet deadened.
Dogecoin Four-Hour Price Chart
Cardano Begins to Make Waves
Now that the world is more focused on energy expenditure behind crypto mining, the natural next step is to look towards ‘green cryptos.’ Cardano is an option there and on Saturday, as both Bitcoin and Ethereum were selling off, Cardano was spiking.
Our own Tammy Da Costa wrote about Cardano earlier this morning, and this may be a coin to watch for those following the crypto space.
Cardano Daily Price Chart
--- Written by James Stanley, Senior Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.