Tesla Technical Analysis – Fundamental trouble

Tesla’s stock price could come under pressure as the near-term fundamentals for Tesla are worsening, due to a highly publicised auto-pilot car crash, and a drop below the $50,000 support level in the price of Bitcoin.

The press accounts towards the recent death of two people involved in a Tesla car crash under autopilot has cut short the recent rally above $700.00. Additionally, the capital gains tax news surrounding the Biden administration is also hurting sentiment towards some of the top US stocks right now.

Getting back to Bitcoin, the top crypto has been in freefall since the weekend, and has been taking out some key support levels. The BTCUSD pair is currently under $50,000, which could hurt sentiment towards Tesla, as cryptocurrencies and the electric automobile car makers fortunes are now highly linked.

Tesla has huge holdings of Bitcoin, and as the top digital assets price drops, so does Tesla’s cash reserves. Tesla were reported to have bought Bitcoin around the $37,000 level earlier this year. Still, the company has substantial profits, however, this could come into question the nearer Bitcoin gets to $40,000.

Musk has also allowed Bitcoin holders to buy Tesla. The more that the down trend corrects, and the general public that hold Bitcoin suffers a loss, the less likely they are to buy Tesla, which is a negative for Tesla car sales in the near-term.

Furthermore, it should be noted that Bitcoin and Tesla has not had a strong price correlation with Bitcoin this week. Tesla’s share price has been treading water, while Bitcoin has slumped by over $15,000. It will be fascinating to see how Tesla’s share value holds up if the price drop in cryptos continue.

On the medium to longer-term horizon, Tesla’s prospects look better. A recovery in the global economy, a rolling out of the Tesla product in new markets, and a move towards green energy in the US all bode well for Tesla’s share price.

Tesla Short-term Technical Analysis

According to the four-hour time frame Tesla’s stock price has staged a breakout from a symmetrical triangle pattern, and had rallied towards the $780.00 resistance level after breaching the triangle pattern.

Tesla’s share price is now starting to consolidate around the $700.00 level, as the upside momentum stalls. Bulls have been defending the top of the triangle pattern, around $680.00 level, however, it still remains a close call as to the next major move.

Key support is found around the $650.00 and $620.00 level. It seems more likely than now that the March price low will hold during downside attacks.