Trader outlines bitcoin prospects after Tesla investment

The trader Ilya Meshcheryakov explains the current market situation.

Bitcoin has risen past $44,000 on the back of news that Tesla invested $1.5 billion in bitcoin.

Elon Musk’s Tesla invested $1.5 billion in bitcoin. The asset price reached $44,800

Given the previously identified accumulation zone for bitcoin between $30,000 and $42,000 and its breakout to the upside, long-term targets significantly exceed $50,000. Even a move through the breadth of the accumulation zone would push bitcoin toward $54,000, not to mention that the impulse itself is statistically larger than the accumulation zone.

The current rise is somewhat emotional, driven by a large number of buyers on the news, so it will be accompanied by pullbacks designed to squeeze long positions. However, structurally the move is very sound, and the approach to $40,000 from below was not impulsive, suggesting a high probability of further growth.

Area of expected activity by TESLA to buy (green) and BTC support levels. Hourly BTC/USDT chart on Binance from TradingView.

There has long been strong interest from large capital in Bitcoin, so the high prices are fundamentally justified.

The only caveat is the significant open interest in long positions, including with leverage. This creates risks of a large number of long squeezes to harvest liquidity by big capital.

If we talk about potential correction levels for the current move, first note the $40,000 and $41,000 levels, which are both strong support levels and a 10% correction from current prices, which would liquidate long positions with 1:10 leverage and higher.

A deeper correction is far less likely, as bitcoin rarely gives a second chance to buy at a good price; however, the $37,500 level is theoretically achievable in case of very active selling.

BTC support levels on the local chart and impulse movement in the wake of the news. Fifteen-minute BTC/USDT chart on Binance from TradingView.

Over the longer term, bitcoin is set to rise above $50,000, but given the emotional nature of the current rise, several squeezes for buyers using margin are likely. Altcoins are currently moving with bitcoin, but could easily yield dominance to it.

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