Bitcoin prices slump below $40,000 due to Elon Musk

The price of Bitcoin has fallen below $40,000. After the comments of Elon Musk and the recalls of several Chinese financial institutions, Bitcoin (BTC), the world’s most valuable cryptocurrency lost 20% of its value in the space of a week. As always, the BTC caused most of the altcoins to fall.

After soaring above $60,000, Bitcoin stabilized for several days around $45,000. After several days of “range” (a phase where the price oscillates between two values), the BTC then broke down. Unfortunately, the supports of the $42,000 and $40,000 did not hold.

After weeks of almost continuous rise, Bitcoin has lost more than 20% of its value in one week. In these conditions, some investors do not hesitate to predict the end of the bull run and the return to a bear market.

Bitcoin prices slump below $40,000 due to Elon Musk
Bitcoin prices slump below $40,000

Several factors have caused the price of Bitcoin to collapse. First, there were successive announcements by Tesla founder Elon Musk last week. After accepting the BTC as a means of payment at the beginning of the year, the car manufacturer backtracked, citing environmental considerations. Soon after, Elon Musk hinted that Tesla might sell its Bitcoin stock before turning around.

Keep Reading:  Bitcoin price shrinks below $50,000 after Biden's new capital gains tax plan

More recently, three Chinese financial institutions have recalled China’s cryptocurrency investment rules. In a joint statement, reported by Reuters, the National Federation of Internet Financing, the Banking Federation of China and the Payment and Compensation Federation reiterated that crypto active-related services are prohibited in the territory. The threat-like recall has raised fears for investors in the sector.

As is always the case, the decline in Bitcoin has been accompanied by a collapse in the price of other cryptocurrencies. Ethereum (ETH), the second-largest crypto in terms of capitalization, lost 14% in one week. It is now trading below $3,000.