Bitcoin rallied from three-month low on Monday in the wake of Tesla boss Elon Musk’s latest reassuring tweet about the carmaker’s bitcoin holdings.
The cryptocurrencies however experienced a volatile session as investors initially sold and then bought them.
In his latest tweet, Musk said “Tesla has not sold any bitcoin”. That seeming clarification came after his weekend tweets that hinted Tesla is considering or may have already sold some of its massive holdings.
Musk has boosted crypto markets with his enthusiasm for the asset class, but has lately roiled trade by appearing to cool on bitcoin in favour of its one-time parody, dogecoin.
The gyrations are beginning to spook even steeled traders.
Bitcoin fell more than 9% on Monday to as low as $42,185, its lowest since Feb. 8, but rallied more than 5% to around $44,220.
Ether, linked to the ethereum blockhain, fell even more to as low as $3,123.94, and then rallied to $3,400. Dogecoin fell nearly 7% to $0.48, and all three are well under recent records.
“Elon Musk has been the catalyst to this, but ultimately it just comes down to the nuts and bolts of what crypto really is: it’s a store of value, but it’s also a momentum vehicle, and right now the momentum is to the downside,” said Chris Weston of brokerage Pepperstone in Melbourne.
“Why would I want to buy bitcoin right now – even if I’m bullish – until the liquidation is over and you see some consolidation in price?” Weston added.