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Bitcoin rapidly dropped from $39,416 at 11am yesterday to $37,754 this morning following a critical message from the billionaire entrepreneur. Ethereum also fell 4.8 percent from $2,454 at 8am yesterday, to $2,337 this morning. The meme coin Dogecoin, which has previously been backed by the Tesla CEO, fell 3.5 percent at the same time.
The price drop appeared to have come after Bitcoin Magazine posted an image of Kraken CEO Jesse Powell predicting the token would hit a record high this year.
Referring to the Lamborghini sports cars, which is popular with crypto investors, he said: “I’ve said one Bitcoin, one Lambo by the end of the year.
“It may be a Lambo with fewer options or a smaller engine at this point, but I think we’re still looking at very lofty price targets.”
He also added Bitcoin was “greener” than critics believe, before adding: “I think Elon has some more studying to do.”
This prompted a sceptical Mr Musk to cryptically reply under the tweet with: “Based on what data?”
Prices immediately plummeted.
Mr Musk is known for causing crypto prices to change, after he also sent Dogecoin soaring last month during his appearance on US sketch show Saturday Night Live.
He posted a meme of Dogecoin on Twitter, before adding “SNL May 8” alongside it.
08:16 Bitcoin braces for a
Analysts have predicted Bitcoin to be hit with a “short squeeze” following the recent price crash.
This means the price could soon soar rapidly due to a huge number of bets against it.
Flex Yang, the chief executive of Hong Kong-based crypto lender and asset manager Babel Finance, said recent market data showed capital inflows are “from short-sellers and that leverage has greatly increased.”
He said: “Given bitcoin’s past market performance, when traders use excessive leverage to short the market during a horizontal price adjustment, there will often be a short squeeze phenomenon.”
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