Fear is gripping the crypto market after comments from Tesla billionaire Elon Musk sparked a 20% sell-off for Bitcoin.
Prices fell to a low of $42K on Monday as the billionaire voiced concerns about the environmental impact of Bitcoin mining, before hinting at a sale of Tesla’s treasury allocation. Then, as irate Bitcoiners publicly canceled their Cybertruck orders in protest, he clarified that “Tesla has not sold any Bitcoin” triggering a bounce back towards $45K.
Cardano was among the few coins that managed to escape the downturn. The proof-of-stake crypto asset hit new highs above $2 as Musk’s mischief spooked a market that was already reeling from US inflation figures and a US investigation into crypto exchange Binance.
This week’s highlights
- Tesla U-turn sparks Bitcoin sell-off
- Cardano defies downturn to hit all-time highs
Tesla U-turn sparks Bitcoin sell-off
The self-proclaimed technoking triggered the market sell-off with an announcement that Tesla will suspend the acceptance of Bitcoin for purchases on environmental grounds hough, the car company plans to keep the crypto asset on its corporate balance sheet.
Elon Musk’s recent comments sent Bitcoin below $45K for the first time since February.
“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions.”
Yet while prices were quick to react, the debate over Bitcoin’s environmental impact appears to have just begun. Norwegian oil billionaire Kjell Inge Rokke told Bloomberg that Musk’s latest comments “haven’t changed anything” for his company Aker, which added Bitcoin as a treasury asset in March and is now considering accepting the crypto asset as a means of payment.
Cardano defies downturn to hit all-time highs
As Musk’s comments sparked fierce debate over Bitcoin’s carbon footprint, Cardano stayed remarkably buoyant.
The smart contract platform, which boasts green credentials with an energy efficient proof-of-stake consensus mechanism, reached all-time highs above $2 early on Sunday. Other blockchains promising a greener crypto economy, however, were not so lucky Tezos and Ethereum both dropped around 20% over the week.
Growing interest in Cardano could be due to billionaire entrepreneur Mark Cuban, who challenged founder Charles Hoskinson to demonstrate the crypto asset’s value in a heated Twitter discussion on Sunday.
The week ahead
Following Bitcoin’s retreat from the all-time high around $65K, the crypto sentiment index is flashing ‘extreme fear’ after months of ‘greed.’
Yet, while this market correction is the biggest pullback of the year so far, the 35% drop is consistent with 2017 bull market corrections of between 30-40%.
Looking ahead, traders will now be waiting to see if the pullback has recharged Bitcoin’s batteries for a robust rally back toward all-time highs, or if the dip has seriously damaged market momentum.
This post originally appeared on the eToro blog.
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Source: https://dailyhodl.com/2021/05/18/cardano-sidesteps-rampant-fear-in-crypto-markets-etoro-crypto-roundup/
