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Bitcoin stabilises as Musk backlash spawns new crypto 'stopelon'

Cryptos recovered some of their earlier losses which had been triggered by Tesla's Elon Musk. Photo: Reuters
Cryptos recovered some of their earlier losses which had been triggered by Tesla's Elon Musk. Photo: Reuters

Cryptocurrencies ticked up on Tuesday morning, recovering the losses from the weekend after Tesla (TSLA) chief Elon Musk sparked a sell-off.

Meanwhile, a new cryptocurrency called Stopelon has been launched purely to limit Musk's influence over the volatile market.

Bitcoin was up (BTC-USD) 1%, trading at $45,005.418 (£31,708.12). Ethereum (ETH-USD) the second-biggest crypto by market cap, rose 0.9%, trading at $3,486.7922. Ripple (XRP-USD) was up more than 6%.

Earlier, the price of bitcoin had crashed to its lowest level since the end of February.

A Twitter account called CryptoWhale tweeted: “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their holdings. With the amount of hate @elonmusk is getting, I wouldn’t blame him…”

Musk responded with the word “indeed,” which caused bitcoin and other cryptocurrencies to plummet. However, later he clarified that the electric vehicle company had not sold any bitcoin.

Bitcoin recovered some of its earlier losses. Chart: Yahoo Finance
Bitcoin recovered some of its earlier losses. Chart: Yahoo Finance

This was after he criticised bitcoin’s environmental impact last week and said Tesla would no longer accept the crypto as a form of payment. He also asked Twitter users if they would like the company to accept dogecoin (DOGE-USD), with a majority voting yes. The joke token was down 2% on Tuesday.

Naeem Aslam, chief market analyst at Ava Tade, said: "Crypto prices are stabilising today as investors see the current sell-off as an opportunity to bag some bargains. Bitcoin is certainly oversold and it is approaching its 200 days simple moving average on the daily timeframe, which is a great opportunity."

Earlier, he had said the bitcoin sell-off was mainly due to Musk "but the reality is that bitcoin lost its upward momentum a long time ago."

Read more: Why Elon Musk's bitcoin and dogecoin tweets don't break rules

"It was clear that bitcoin prices went too far, and a correction was due. This correction is taking place now, and it is likely that we may see the bitcoin price decline further."

"When combining fundamentals such as positive net inflows of bitcoin to exchanges... we can ignore what large egos and influencers say, and see that a pullback was bound to happen," said Justin Chuh, senior trader at digital asset investment manager Wave Financial.

"But we have to accept that those voices chirping around on social media aren’t helping and can actually make moves. This is healthy, but I think we all wish this didn’t happen."

Chuh isn't the only one who doesn't appreciate that Musk's statements and tweets can have an instant and major impact on crypto prices.

The founding community of stopelon said: “Elon Musk is infamous for irresponsibly manipulating the cryptocurrency market with his Twitter account. He’s toying with people’s portfolio like candy, like the narcissistic billionaire he is and always will be. We say ENOUGH. Hence, we created $STOPELON.”

According to Benzinga, stopelon's plan is to use the capital raised through the project to gain control of Tesla stock and fire Musk.

STOPELON's price increased by 512% from a 24-hour low of $0.000001756 to a high of $0.000010756 before correcting by over 58% to its current price of $0.000006797, the report said.

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