A cryptocurrency analyst stated that it is necessary to compare the movement of BTC with that of stocks to predict its future. He said that this is necessary to determine the direction of the BTC price. After all, assets are correlated.
However, the anonymous host of Invest Answers pointed out that it is not necessary to follow the entire traditional market. According to him, just following one action will give investors light on the future of BTC: Tesla shares.
To defend his thesis, the analyst created a pair called Tesla/BTC. The purpose is to predict future price action on the top cryptocurrency on the market. “Let’s take a look at the pair. This is the pair Tesla divided by BTC, and you can see that the price is now around 0.036,” he said.
As the analyst highlighted, when looking at the pair and the value, it is possible to see that BTC is back to the levels of the end of 2020. “It’s like a big huge U,” he pointed out.
The analyst highlighted that while Tesla remained stable, the price of BTC dropped.
“The blue line is the 200-day moving average. This is about 0.024 and we are currently trading at 0.036. While Tesla has remained stable over the past 12 months, BTC is down 70%,” he said.
Tesla and BTC
Furthermore, the analyst said that most assets with true underlying utility and value will revert to the mean. And that’s why he expects Tesla and BTC to post highs within six months.
“Short and succinct, not financial advice of course, everything reverses unless it’s crap or it’s broken,” he points out.
He reasoned that Tesla has held up well during the market correction and downturn, and when it recovers, BTC will go along with it.
“Six to 12 months, which goes through the summer of 2023 and that’s very, very conservative,” he said.
Regarding Tesla’s future earnings, the analyst mentioned that the company will take a big drop.
“They will be hit hard. They are going to have an impairment charge of maybe $450 million dollars,” she said.
Finally, he pointed out that the drop will be healthy and when it occurs, it will be BTC’s turn to stabilize so that both can recover together.