Julian Bridgen, co-founder of the macroeconomic research firm MI2 Partners, Believes that Tesla stock (TSLA) shows signs of a bubble. He compared the stock bitcoin (BTC) in 2017 when it hit $ 20,000 and dropped 58% in two months.
From the yearly high to the month’s low, the TSLA price plummeted 33.74%. The stock has recovered 12.46% in the last 48 hours.
Between Tesla stock price chart and bitcoin price chart without any fractal
Bradgen shared a chart of Tesla stock with an excerpt from Bitcoin’s weekly chart from 2016 to 2019. He demonstrated some technical similarities between the two charts and Explained:
“What defines a bubble?” A great story is important. In fact, the better the story, the bigger the bubble. Then a lot of liquidity and finally a classic bubble chart. For example, #Bitcoins in 2017. There are three of us at TSLA. “
Tesla stock price chart with bitcoin weekly chart. Source: Julian Bridgen
While similarities exist between Tesla and the Bitcoin chart, there are several important differences. First, the chart compares Tesla stock’s daily chart to BTC’s weekly chart. Second, Tesla, as a public company, is fundamentally different from bitcoin from a digital peer-to-peer network.
In addition, bitcoin is being viewed as a storehouse of value, often referred to as “digital gold”. Investors, both institutions and individuals, use BTC as a means of storage and transfer of value. For example, MicroStrategy bought $ 11 million worth of bitcoin on August 11, adopting it as the firm’s primary treasury asset.
In contrast, Tesla is the world’s most valuable car manufacturer whose share price depends on the company’s performance.
But there may be a technical similarity between the Bitcoin and Tesla charts – especially since the correlation between BTC and stocks reached new highs this summer – fundamental factors affecting TSLA stocks more than technical.
In the near term, analysts say Tesla has three main catalysts that can aid the stock’s recovery. Credit Suisse analyst Dan Levy outlined three factors as S&P 500 inclusion, Battery Technology Day, and stock splits.
On September 22, Tesla hopes to host Battery Technology Day. Analysts expect Tesla to announce longer-lasting and better-performing battery technology.
The release of new technologies and the inclusion of the S&P 500 of Tesla stock in the medium term can lead to recovery of variable stocks.
At the same time, some analysts predict inclusion in the S&P 500, only to see significant challenges due to Tesla’s size. Levy said on 2 September:
“Of course, there is no guarantee that Tesla will be included in the next add-on challenges to add a company the size of Tesla.”
As such, an argument could be made that the pullback of Tesla stock was to be expected, and was largely accelerated by Nasdaq’s recent recession.
What do analysts say about BTC’s long-term outlook?
Bitcoin charts in late 2017 are often used to compare with other charts depicting vertical rallies.
From the initial run-up to $ 20,000, BTC has mostly consolidated between $ 6,000 and $ 10,000 over a high timeframe. Recently, it briefly surpassed the $ 12,000 resistance level and is now showing strength in its ability to stay above $ 10,000.
Some investors, including Three Arrow Capital CEO Su Zhu said He was surprised by BTC’s stability above $ 10,000, which expressed optimism for its macro price trend.