Why Tesla’s sale of bitcoins is great news

Electric car maker Tesla sold 75 percent of its bitcoin holdings last quarter, adding more than $936 million to its balance sheet. Tesla CEO Elon Musk said it was important for the company to maximize its cash flow due to the containment and closure of its Shanghai factory in April.

While many believe that Tesla’s sale of bitcoins could create negative pressure on the price of BTC, Tron founder Justin Sun believes that this could be great news for bitcoin holders. Justin Sun explained in three points why he thinks this news is great for the Bitcoin ecosystem.

1. The market no longer has to worry about @Tesla selling BTC, which has been haunting us for a long time.
2. Tesla’s sale of BTC worth nearly US$1 billion shows @Bitcoin’s liquidity for all major bodies.
3. Tesla trading @Bitcoin shows good precedent for all companies holding BTC. We expect more big companies to buy in the future. Congratulations to @elonmusk!

Bitcoin (BTC) price correction

The news of Tesla selling its bitcoins has certainly put some downward pressure on the price. On Wednesday, the price of BTC rose above $24,000, but it has corrected below $23,000 for now and is trading near its 200-week moving average of $22,800.

Over the past few weeks, the 200-week moving average has served as major resistance for bitcoin. However, it will be interesting to see if Bitcoin could sustain these weekly closing levels. Crypto-currency market analyst Rekt Capital explains:

BTC is +6% above the 200-week MA. To make a recovery from the 200 week MA as support, $BTC must close weekly above $22800.

#BTC is +6% above the 200-week MA

To perform a reclaim of the 200-week MA as support, $BTC needs to Weekly Close above $22800#Crypto #Bitcoin pic.twitter.com/3CRZ8V3o8k

– Rekt Capital (@rektcapital) July 20, 2022

Elon Musk said that the sale of bitcoins should not be considered as a ” verdict ” of the company. He also added that Tesla would be “certainly open to increasing our bitcoin holdings in the future“. However, this is unlikely to happen anytime soon given the current uncertainty in the global macroeconomic environment. Interestingly, Tesla has not sold any of the Dogecoins it holds.