Key Bitcoin Points
- Bitcoin surged higher on Wednesday as investors digested a new announcement from Tesla.
- The US carmaker said that it has started accepting cryptocurrency as payment for its vehicles.
- BTC/USD stayed on course to break above its descending triangle pattern.
Bitcoin pared its losses from the overnight US session Tuesday as investors’ focus shifted on Tesla’s latest crypto move.
The US carmaker added a bitcoin payment option on its US website earlier Wednesday. Founder Elon Musk took the news to his social media handles, announcing that the company now uses internal and open-source software while operating Bitcoin nodes directly. The entrepreneur further confirmed that Tesla wouldn’t exchange its crypto earnings with fiat currencies.
“Pay by Bitcoin capability available outside [the] US later this year,” he said.
Traders reacted positively to the Tesla news. Bids for the benchmark BTC/USD instrument started rising shortly after Mr. Musk’s tweet went viral. The pair breached $57,000 during the early New York trading session but pared a small portion of it daytraders secured their profits.
In doing so, Bitcoin also tested its 50-4H moving average (the blue wave in the chart below), with additional downside pressure coming from a falling trendline slope just above. The trendline constituted a Descending Triangle that traders consider a bullish continuation pattern during an asset’s uptrend.
Optimistic fundamentals led by Tesla’s announcement, coupled with the Descending Triangle formation, promised further upsides to BTC/USD. Should a breakout follow suit, the pair faced the prospect of rising by as much as the Triangle’s maximum height. That meant a $66,000 Bitcoin in the short-term.
Meanwhile, an upside rejection risked a decline towards the Triangle’s lower trendline support at $53,000. A breakdown and traders could have their short targets extended to the lower $50,000s.
“54k has been a very pivotal level, and Bitcoin has held it once again, following the sweep of the low,” said TraderKoz, an independent market analyst. “Still think we get a move up to Monday’s high from last week. Any dip to around 55k would be a long, in my opinion.”