Elon Musk appears to be influencing the Bitcoin market in many ways. Since his electric vehicle company Tesla officially arrived in the crypto market in February, Musk’s influence, dubbed “the Elon Effect” by many, has played a significant role in shaping the market movement.
There’s the usual price pump that is recorded after the Billionaire makes tweets about some cryptocurrencies—mostly Dogecoin and Bitcoin—and they usually either skyrocket for a few days before peaking or slightly drop depending on whether his tweets are amplifying bullish or bearish sentiments.
However, on a more crucial note, Musk has influenced early investors in the market to press pause on their traditional selling habits. Usually, as on-chain analyst Willy Woo recounts in a tweet, early investors are fond of offsetting their accumulated Bitcoins in sales, just midway into the Bitcoin rally. But this time, things are beginning to take a different turn.
“Early investors like to take profit by selling their coins (which carry more dormancy) into every rally, then this guy called Elonmusk comes along and decides to buy, now they HODL like the rest of us.” He tweeted.
Elon Musk’s arrival has caused the big bodies to remain calm, just like the others. Perhaps, forcing them to keep an eye out for when a major turnaround is recorded.
Since the market is only a few months into the bull run, selling may not be the most effective move for these investors.
From the Chart showing the “Average Coin Dormancy,” we can see the movement pattern of early investors. From March 20th, we can detect that sales have begun to increase. From November of last year to January of this year, selling pressure intensified, hitting an all-time high. Upon Tesla’s entry in February, a significant drop was recorded and the pattern has almost been consistent since then.
Glassnode also reported a while back that miner sales have halted since the “Elon Effect” kicked in. Dumping their usual selling pattern, Bitcoin miners have also kept themselves on hold, in anticipation of a much more bullish market as they stack some coins into their reserve.
Short-term holders have also stopped selling their coins, according to this data. As explained by the analyst who made close observations, “Bitcoin SOPR represents the degree of profit taken on a particular day. When SOPR is high, profits are being taken.”
The above chart shows that SOPR is already correcting downwards, which means that the Bitcoin market is beginning to stabilize.
“When SOPR is low, losses are taken
When SOPR resets back to 1.0 during bull consolidations, it suggests holders who are in profit have stopped spending coins.” The analyst observed.
As the market steadies, there’s more room for the bulls to make an easier upward movement.