Crypto newsletter: Musk has once again shook the crypto markets

• Elon Musk continues to move the crypto markets
• Bitcoin dominance lowest since June 2018
• Ethereum defends major support zone

Last week was negative for the whole cryptocurrency market and moods deteriorated significantly over the weekend after Elon Musk tweets in which he suggested that Tesla may offload Bitcoin from its balance sheet. As a result, Bitcoin's dominance dropped to three year low of 40%. The capitalization of all digital assets in circulation fell to 2.11 trillion, while an average daily trading volume is registered at $256 billion.

Bitcoin market dominance continues to slide. Source: Coinmarketcp.com

Musk hits Bitcoin

Last week, the cryptocurrency market was ruled by the tweets of billionaire Elon Musk. On Wednesday evening Tesla CEO announced that his company will suspend vehicle purchases using Bitcoin due to concerns over the environmental impact of the cryptocurrency. "We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel," read the statement. The drama continued on Sunday when Musk replied to a tweet from an unverified Twitter account predicting that Tesla may dump its Bitcoin holdings this quarter. To the chagrin of the Bitcoin community, Musk simply replied: “Indeed” and the price of the most popular cryptocurrency fell 10%. However almost 12 hours later Musk posted a follow-up tweet, writing: "To clarify speculation, Tesla has not sold any bitcoin" which caused the price to rebound briefly. This may indicate that the company is planning to hold rather than sell off its crypto holdings. 

Bitcoin tested the support at $42,000, which is also marked with the lower limit of the 1:1 structure, however sellers failed to uphold momentum and price bounced off it. As long as the price sits above , further upward move is possible. Nearest resistance to watch lies at $52700.  Source: xStation5

Ethereum at key support zone

While Bitcoin is now down more than 30% from its April 14 all-time high, several altcoins are much more resistant, with Ethereum currently down 20% from its May 12 peak of $4,358 on May 12, while Cardano yesterday jumped to new all-time highs of $2.45. 

Ethereum price shows relatively higher buying activity as it surged roughly 14% from its recent swing low.  The nearest resistance can be found at $3720, while strong support zone lies between $3000 handle and $3215 level. Source: xStation5

Meanwhile institutional investors do not seem to be concerned about the recent drops in cryptocurrency prices. If we look at the Grayscale fund, then we will notice that despite the recent sale-off, the number of Bitcoins owned by the fund has not changed.

Grayscale BTC holdings remain unchanged. Source: BYBT.com