Is It You, Elon?

The DopeFather’s Powers over Crypto are Exaggerated

I once though about developing a sentimental analyzer which would buy Dogecoin whenever Elon Musk tweeted something positive with the word “DOGE” and sell whenever he tweeted something negative with the same word. Had I done this earlier this year, I would have been rich. For Bitcoin, however, the story is more complex.

Experts and analysts seem to agree to the obvious: Elon Musk is in control of the Crypto market sentiments, causing huge price displacements with simple tweets. In the past couple of days, the tweet was as simple as a broken heart along with the word “Bitcoin” and a funny, yet vague meme about breakup and Linkin Park. Subsequently, lots of Scherlock Holmes wannabes were speculating to whether he was meaning good or bad for the most powerful cryptocurrency. Did he mean that he is departing ways with Bitcoin? Or was he just expressing his sentiments on the recent price crash? Or was it another cryptic signal for the ever elusive adoption of Doge? Most likely, notwithstanding, the cryptic nature of the message was intended by the man who knows very well that his followers and groupies (and even recent haters), whether they are experts or laymen, would waste time trying to analyze his motivation, even though it’s lying bare in front of those who want to see.

The real answer for those speculative questions by the clueless detectives is — just like the Linkin Park meme — it doesn’t matter. One of the richest men in the world and one who is regarded by many as pioneer in many fields, Elon Musk seems to be addicted to attention just like any teenager who is breaking his way into TikTok or Instagram with hopes to be an influencer. Motivated by his success bringing the lamely-named Dogecoin to the limelight, making many people rich in the process, Elon decided to try his luck with Bitcoin. Whether he really thought that he would affect the price of the heavy-volumed Bitcoin as he was able to do with the skinny Doge, it’s not clear, but what’s clear is that people will attribute the price changes to him no matter what.

Powered at certain times by the luxury of being able to contradict himself without being overly judged and at others by the ability to conceal his real motives between the lines without people even trying to dig deeper, Elon Musk plays the Crypto Weatherman without saying it — it might be also without him noticing it. If the price is clearly about to fall, he tweets something negative about Bitcoin; the price drops and Elon is the villain. After the down cycle and when it’s clear that the price is going up, he tweets something contrarian to his previous negative tweet and so Elon saves the day. If it’s something in the middle, then he tweets a cryptic message and plays safe. Then, the work of fitting the interpretation is to be done by the experts, analysts, and fans. Both “Elon’s Cryptic Message Sends Bitcoin’s Price to the Sky” and “Elon’s Cryptic Message Sends Bitcoin’s Price to the Ground” would work eventually depending on the price direction.

Let’s take this broken heart tweet as an example. He published it on June 4, when the price was already at the major resistance of the 20 SMA (Simple Moving Average) in the daily chart. Having been green the 2 previous days and hitting that major resistance, everyone with a basic knowledge of financial charts would rest assured that there would be a very high probability of a pullback on that day. What about May 13, that day when Bitcoin started losing 20% of its value, just few days before the crash? It was also clear that the price is slipping further given wave analysis. The last peak on May 9 was very disappointing when compared to the all-time-high on April 15 and it was clear since then that the down cycle is already underway. The crash on May 19 went through without any alleged intervention from Elon, so the media decided to find another scapegoat in the Chinese state with the old news of cracking down on Crypto transactions!

All this might be a coincidence, but it’s more probably a clever play from the Tesla guy who fills his feed with memes that appeals to his audience of male youngsters who mainly only focus on cars, chicks, and money. Whenever he cries “Doge” they believe him no matter how much he lies about it. It would be natural then to assume that he possesses a similar power with Bitcoin, but that’s not supported by neither the facts nor numbers, the first through analyzing the price action, the latter through analyzing the volumes.

To put things in context, one should look specifically at May 12, a day before Elon’s infamous tweet about energy consumption of Bitcoin. That day, the price of Bitcoin fell from 58K to 48K, as it was clear that 20 SMA support is being broken, a clear SELL indicator which explains rather logically the sell-off. On May 13 and May 14, after the negative tweet, on Coinbase at least, the prices rebounded a little amid high volatility, which is normal after such an incident. On May 15, hitting the POC resistance of the Volume Profile of the May 12 decline, the price went further down, as expected given the recent momentum. The pattern of the decline is similar to the previous down cycle in April, with a temporary resistance at the lower bound Standard Deviation and a subsequent further decline. It is also compatible with the definition of wave A in Elliot’s Wave Principle. Furthermore, volume analysis indicate no significant increase after Elon Musk’s tweets, as one can easily check on the daily charts.

It’s a given that Elon Musk can control the sentiments of his young followers who mostly idolize him. But to rather believe that he can control many financial institutions who invest in Bitcoin is a bit far fetched, a complex condition that fails in front of simpler and more logical explanation. It’s a shame to see media outlets like Vox and Financial Times wasting readers’ time with lazy articles attributing any change in the Crypto prices to this man and giving him the publicity he is desperately addicted to. It’s definitely a case of collective delusion. Of all the analysis I have found, only one on MoneyWeek seemed rational, attributing the crash to inflation.

Elon Musk once called himself the DogeFather. With all those dopes who call themselves journalists and experts, Elon Musk deserves more to be crowned as the DopeFather.

Source: https://medium.com/bearamid/is-it-you-elon-cfd0e8e97482?source=rss——-8—————–cryptocurrency