20.05.202118:18 Forex Analysis & Reviews: Elon Musk's "Diamond Hands"

Recently, the name of Elon Musk is again on the lips of the whole world. Given that it is Musk's tweets and statements that affect bitcoin almost better than anything else, many investors of different calibers are looking forward to his new comments. And they waited for a similar tweet, while bitcoin was in its downward rally yesterday. On his Twitter account, Musk wrote: "Tesla has diamond hands." In the language of Wall Street, this means that a company or investors hold a certain asset until the end, despite a strong fall. Thus, many traders could "read" in this message that Tesla is not selling its bitcoins at this time. It is not known how much this information corresponds to the truth, since a couple of months ago, Tesla already allowed its customers to buy electric cars for bitcoin. And then a month later, they announced the suspension of such practice. Nothing prevents Musk from writing tomorrow or saying that Tesla has sold all its bitcoins and is now investing in Dogecoin.

Meanwhile, several companies and banks associated with investing in digital assets announced a record outflow of funds and crypto instruments. Similar statements were made by the investment bank JPMorgan, as well as the asset management company CoinShares. The latter announced an outflow of funds for $98 million, which is an absolute anti-record. The last such record was set in May 2019, when the outflow was 19 million. It should be understood that this data is only for one company. And there are many such companies, therefore, the amount of capital outflow is much higher.

It also became known that many investors and traders are afraid that China will continue to tighten the rules for the circulation of cryptocurrencies and work with them to financial organizations. In addition, it is possible to introduce restrictions on mining, storage, and circulation of cryptocurrencies in other countries. In general, now the whole market is sitting on a powder keg and just waiting for where and when the new kick will come from. Experts agree that the collapse was due to inflated expectations of investors. Simply put, for a crypto asset to constantly become more expensive, a constant new influx of investors and investments is required. And the efforts of one Microstrategy company are clearly not enough here. Investors who bought bitcoin above $50,000 made a mistake because, after their investment, new investments in bitcoin simply did not follow. The market has exhausted its demand, and Elon Musk and other negative news led to the fact that many margin positions were eliminated. As they say, the market is "overheated". However, we have long said that bitcoin is preparing for a correction. This was visible on the upward trend on the 24-hour time frame. Now, as we have already said, we need to wait for the market to calm down, and carefully monitor the key levels.