Analysis: 3 Reasons Why Bitcoin Is Not Influenced by Elon Musk

The bitcoin price fell 17% when Tesla CEO Elon Musk criticized its energy consumption, but has now rebounded.

Bitcoin fell to $45,600 on May 13 and is now at $51,000, having recovered more than half of its losses. the

As the drama continues to unfold, Cointelegraph considers why, on a fundamental level, bitcoin is ultimately resilient to the actions of a single user — no matter how influential he or she is.

Bitcoin's proof-of-work (PoW) algorithm rewards miners and investors over time as their years of work make the network stronger.

The longer Bitcoin lasts, the less likely it is to be attacked, or to see participants leave the Bitcoin network for another cryptocurrency. the

Analysis: The rise of Ethereum yesterday may be due to large-scale transactions among giant whales, rather than new capital inflows: According to the latest report of the blockchain platform Xangle, despite the sharp rise of Ethereum yesterday, the transaction volume on the chain fell by 50.5% month-on-month on that day. The number of transactions and the number of new addresses decreased by 3.2% and 14.4% respectively. According to Xangel analysis, the rise of Ethereum this time may be due to large-scale transactions among giant whales, rather than new capital inflows. In addition, yesterday's market speculation that "the national blockchain service network BSN supports the access of ETH and EOS public links" also drove up the price of Ethereum. [2020/4/17]

This is exactly why Bitcoin continues to compete as the cryptocurrency of choice — as many believe, no altcoin can “do Bitcoin” like Bitcoin. the

Analysis: ETH may return to highs of $290 in the next few weeks: After falling to $150 earlier this week, Ethereum began a strong recovery towards highs of $175 on Thursday. Crypto trader "HornHairs" said that this price action makes ETH's 12-hour reverse chart start to resemble "the upward momentum seen during the full-scale correction in 2017", and the chart he shared shows that Ethereum recently suffered a setback at a key resistance level . ETH is currently bouncing off the support at $148, which bodes well for the bulls. If a "full pullback" occurs, ETH will return to the $290 high in the next few weeks. (Bitcoinist)[2020/4/17]

For Musk, however, proof of work is important for another reason. Just because a well-known investor changed his mind about the value of Bitcoin, causing the price of Bitcoin to drop, miners have no additional incentive to exit the network or cash out.

Dynamics | Coindesk analysis: BTC may rise to $4,000 in the future: According to Coindesk analysis, BTC prices broke through key resistance levels yesterday, driving the rebound to above $4,000. On the daily chart, BTC closed near $3,633, supporting a bullish run represented by a positive divergence on the 14-day relative strength index (RSI) and a massive falling wedge breakout. According to analysts, BTCBTC may test the psychological level of $4,000 in the next 48 hours, and the next target is the resistance level of $4,410 (high on November 29); if BTC’s daily closing price is lower than $3,633, it will weaken Bullish scenario, but looks unlikely in the short term. [2018/12/19]

The "network effect" in this regard means that Musk is ultimately delivering good, not bad, publicity for Bitcoin — and even the price suggests that his words and actions have not changed the nature of Bitcoin or its capabilities.

Coinness analysis: BTC continues to trade sideways and needs to pay attention to the risk of short-term callbacks: According to the analysis of the author of Coinness, BTC has completely broken through the 10-day moving average and the 50-day moving average, and the 50-day moving average has shown signs of rising. On the daily line, BTC has not yet reached the middle track of the Bollinger Band ($8869), there is still room for growth. However, on the 4-hour chart, BTC has crossed the upper track of the Bollinger Band, and there is a need for consolidation in the short term, and there is greater pressure to continue upward, so attention must be paid to the risk of callbacks. There are also some callback signals on the hourly line. Since BTC traded sideways at 1:00 a.m. today, both MACD and RSI indicators have turned downward. But as long as it does not completely fall below the 50-day moving average ($8406), BTC still has a chance to hit the stage high of $8880. [2018/5/21]

PlanB, creator of the stock-to-flow Bitcoin price model, commented on this phenomenon: "Why is Proof-of-Work important to Bitcoin? Because valid hashing (PoW) is how P2P nodes know that a block is valid." , without the need for a server or trusted third party".

“Bitcoin is dead without PoW!”

Bitcoin 7-day average computing power 1-year chart Source: Blockchain.com

Despite the sudden drop in bitcoin prices following Musk's comments, bitcoin's recent price action says more about its resilience to criticism than its susceptibility.

In this event, BTC/USD fell for just two hours before bouncing back and holding the higher price. Not only that, but the drop is also in line with regular price action this year and doesn't even violate any long-term price trends.

The 21-week exponential moving average (EMA) is a particularly important feature of the 2020-2021 bull market. Analysts say that level will determine where prices bottom on dips — a level that was held even during the last bull market in 2017.

This time, Musk also failed to overthrow the indicator. Bitcoin stopped falling when it encountered 21EMA during the decline, and the lowest briefly touched $45,650.

BTC/USD weekly chart (Bitstamp) and 21-week exponential moving average Source: Tradingview

As with previous views on Bitcoin, it needs to be looked at in the long run.

Once the dust settles on Musk’s personal energy criticisms, the broader “debate” about how environmentally friendly Bitcoin is will continue after him. Yet most of the common accusations have long been debunked for myopia and lack of evidence.

Just last week, MicroStrategy CEO Michael Saylor emphasized in a public interview that claims that Bitcoin is “harmful” to the environment lack intrinsic merit.

Responding to Musk, he called Tesla's decision to stop accepting bitcoin payments "ironic."

"Ironically, no additional energy is used in bitcoin transactions," he wrote on Twitter.

“Energy is used to secure cryptoasset networks, and all things considered, the net impact on fossil fuel consumption over time will be negative.”

Therefore, expanding one's time horizon is critical to understanding why Bitcoin is worthwhile. As Saifedean Ammous, author of the best-selling book "The Bitcoin Standard," often mentions, "low time preference" makes Bitcoin investors understand that refusing to use reliable money for environmental and other reasons will lead to more energy wasted in unreliable ones. on the substitutes.

This time, Ammou didn't beat around the bush.

"Unless you also switch rocket and battery manufacturing to 'more sustainable energy,' you'll look like an ignorant hypocrite," he tweeted, referring to Musk's other company, SpaceX .

"The world needs sound money more than your rockets and government-subsidized electric cars."

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