Bitcoin Drops After Musk Tweets of Breakup

Bitcoin fell Friday after Tesla CEO Elon Musk put out a cryptic tweet hinting at a breakup with the largest cryptocurrency.

• Musk tweeted a broken heart with the bitcoin logo and a picture showing a couple in the midst of a breakup during the Asian hours.
• The crypto community took it as a sign of the billionaire distancing himself from bitcoin, leading to price losses.
• Bitcoin fell nearly 7%, hitting lows under $36,500 and reversing Thursday's rally to $39,200. Other cryptocurrencies including ether, cardano, polkadot and dogecoin followed suit, suffering relatively bigger losses.
• The pullback poured cold water over the optimism generated by the symmetrical-triangle breakout confirmed on Thursday.
• "The failed breakout is not a good sign," Delta Exchange CEO Pankaj Balani said. "We could see deeper losses if the recent range is breached to the downside."
• Bitcoin is currently down more than 40% from the record-high $64,801 reached on April 14.
• The cryptocurrency fell by 35% last month after Tesla delisted bitcoin as means of payment, citing environmental concerns. The move quashed hopes for widespread corporate adoption.
• Musk's latest tweet may further amplify those fears.
• Data provided by Skew shows the options market is biased bearish, with long put trades accounting for 29% of the flows seen today and short call trades accounting for 30%.
• Investors typically buy puts and sell calls when the market is expected to drop.

Also read: Bitcoin’s Bull Market ‘May Have Come to an End,’ Says MRB Partners

Correction (Jun. 4, 2021 15:03 UTC): Bitcoin is down more than 40% from its all-time highs reached on April 14, not 70% as mistakenly written in an earlier version.