Volatile trading sees Bitcoin slide to three-month low

Bitcoin tumbled over the weekend before rebounding sharply on Monday, as investors reacted to a series of comments by Tesla head Elon Musk.

The volatile session started when Musk tweeted last week that Tesla would stop taking Bitcoin as payment, owning to environmental concerns about the energy required to process transactions. While defending that decision over the weekend, Musk appeared to imply Tesla was considering selling, or had already sold, some of its Bitcoin holdings.

That caused the cryptocurrency to tumble further, falling to below $43,000, its lowest level since February.

But on Monday Musk then caused a sharp upswing, after tweeting: "To clarify speculation, Tesla has not sold any Bitcoin."

By 1000 BST, the cryptocurrency was trading at just over $45,000, although it remains well off its April high of $66,000.

Neil Wilson, chief market analyst at Markets.com, said: "I thought Donald Trump’s ban from Twitter would mean markets would suffer less noise. I was wrong. Now we have Elon Musk moving crypto prices with his missives.

"The latest in the drama saw Bitcoin jump about $2,500 after Musk denied Tesla had sold its Bitcoin holdings. A nice pop, but this is small versus the Musk-induced selling that has been taking place lately.

"There is nothing new I can say about Bitcoin: volatile, highly speculative, easy to manipulate. A bubble."

Naeem Aslam, chief market analyst at Ava Trade, said: "It is true that the current sell-off in Bitcoin price is mainly due to Elon Musk. But the reality is that Bitcoin lost its upward momentum a long time ago.

"It was clear that Bitcoin prices went too far, and a correction was due. This correction is taking place now and is likely that we may see the Bitcoin prices decline further. The near-term support Bitcoin is near the $38,000 price level."