Bitcoin has been in uncertainty for more than two weeks due to a significant oversaturation of the asset, as well as attempts to consolidate prices and overcome the $60,000 mark. Throughout this period, the market was in a wait-and-see position. BTC/USD quotes reacted poorly to positive news impulses, and attempts to break through the psychological boundary were unsuccessful. Therefore, the increase in the institutionalization of the asset stopped, and market participants expected an impulse that would allow the cryptocurrency to overcome $60,000 or cause a correction.
The momentum turned out to be negative, and the main cryptocurrency fell by 15% over the past day. The total capitalization of bitcoin collapsed past the $1 trillion mark, and the daily trading volumes exceeded the $100 billion mark. This can drastically affect the balance of power in the cryptocurrency market, as well as aggravate the bitcoin correction. But first, let's look at the reasons for such a sharp collapse. First of all, this is due to the most widespread and publicly available news: Elon Musk said that Tesla stops accepting bitcoins as payment for its products. This is due to the excessive consumption of electricity for mining the first cryptocurrency. Various US officials and public figures have spoken about this lack of assets.
In addition to the short-term extremely negative effect, such a statement can become a significant reorientation of the market to more stable assets in terms of production. And the April test transaction of the merger of ETH 1.0 and ETH 2.0, thanks to which electricity consumption decreased by 99%, came to an end. In the near future, there are no updates in the bitcoin network related to the mining process or a reduction in energy consumption during transactions. Given Tesla's suspension of cooperation with BTC, the attitude of institutional investors to the asset will become more wary. Large companies may perceive the combination of these events as a signal for the sale of the cryptocurrency, which can collapse the entire market.
An additional factor that exacerbated the fall in bitcoin was the collapse of the US stock market. The unfavorable economic situation, as well as the increasing unpredictability of the situation around BTC, caused a significant decrease in interest from large companies. An outflow of retailers is also expected, who have lost $4 billion over the past day. Due to the collapse of bitcoin quotes, long positions of 430,000 users of crypto-exchanges were liquidated, and the largest loss of one trader was $38 million. The situation was also aggravated by the achievement of a total cryptocurrency market capitalization of $2.5 trillion. In the coming days, a technical correction of all cryptocurrencies is expected, associated with the achievement of a new indicator, however, the collapse of bitcoin exacerbated the situation for all crypto assets.
It is extremely difficult to predict the further development of events since the market reaction is important at this stage. If the community perceives Musk's announcement and the suspension of cooperation with bitcoin as a fundamental and final decision, then a significant sell-off could occur, which will also cover altcoins. As of 10:00 UTC, bitcoin is quoted at $48,500, but the current price dynamics is negative. The asset will likely drop to $43,000-$44,000, where the main support level is. All other things being equal, without a flow of negative news, a change in the bearish trend may occur at these levels, which for the next few days paralyzed the market with a stranglehold.
