Tesla's share price declined because its share price was correlated with Bitcoin's value
Tesla's share price declined because its share price was correlated with Bitcoin's value

Tesla's decline accelerated on Tuesday as investors abandoned world-class high-tech companies.

The electric car maker's share price fell 13% on its worst business day since September, but most losses did not recover.

Tesla is down 8.55% on Monday and the stock is currently down more than 15% in a week. Besides Tuesday's decline, Tesla has a negative outlook for 2021.

The technology sector freed the market from the failure caused by the Coronavirus last year.

However, the prospect of more stimulus and vaccine launches on a large scale makes the weak cyclical industry more attractive to investors.

Tesla lost money for the third week in a row as the stock fell below its 50-day moving average for the first time since November.

Moving average is a technical indicator used to determine momentum.

After purchasing a $ 1.5 billion cryptocurrency, the company also faced fluctuations in the price of Bitcoin, which has fallen 10% in the past 24 hours, dropping to over $ 50,000 on Tuesday.

Tesla (Tesla) was one of the best performing stocks of the year until 2020, and this momentum continued until 2021 when the stock reached an all-time high on January 25.

However, the stock has since fallen by 28%.

Remember, Tesla wasn't the only technical name pushed to sell the day before trading.

The Nasdaq index fell 2.5% on Monday, Apple, Amazon and Microsoft all fell more than 2%, and the Nasdaq index fell 1.7% on Tuesday, compounding those losses.

According to Wedbush stockbroker analyst Daniel Ives, Tesla's stock price is now directly linked to Bitcoin's price after Tesla invested $ 1.5 billion in a volatile cryptocurrency.

Ives said: Musk already knows the history of Bitcoin on the streets. As we saw on Tuesday, Tesla made a profit in its first month of owning digital gold on paper, but it comes with additional risks.

He added, "With Tesla entering the bitcoin market, Musk could give investors a short-term look at the major electric cars."

Despite some concerns, Ives still believes Bitcoin is a smart move for electric car makers.

Ives estimates that Tesla has made more than $ 1 billion in cryptocurrency investments.

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