After a spectacular performance this week, cryptocurrency markets remain weak this Saturday as Bitcoin falls to the $22k level. The good news is that Ethereum still managed to hold above the $1,500 level. Even with a 7% drop in the past 24 hours, its 7-day performance is excellent, rising by over 25% in the past week. The global cryptocurrency market cap is down by 5% but remains above the $1 trillion mark. Let’s look at relevant Bitcoin news and see where the market is heading next week.
After Tesla’s Q2 earnings report revealed the company sold over 75% of its cryptocurrency holdings, the news has been making headlines over the past several days.
While some analysts argue that Tesla’s Bitcoin selloff of over $300 million could be an attempt for the company to “wash trade,” to claim capital losses and offset other gains throughout the year, however, with the global bear market, it’s doubtful that the company had substantial capital gains in its other investments.
According to a Bloomberg report, while the cryptocurrency selloff added substantial cash to its balance, Tesla booked a depreciation and impairment charge of over $920 million.
After announcing that the company bought over $1 billion in cryptocurrency in February 2021, the sale of most of their BTC holdings added a substantial impairment charge to their balance sheet, which could hurt overall earning numbers.
For those unfamiliar with an impairment charge, it’s an accounting term used to describe a drastic devaluation of a recoverable value of an asset. While a depreciation charge is expected wear and tear of assets like company equipment, an impairment charge is recorded during unexpected damage, such as a drastic devaluation of certain assets.
While Tesla’s stock registered a 10% gain in the past week, its year-to-date performance is weak, as the stock has depreciated by over 30% since January. The Q2 earnings report is undoubtedly helping the company’s stock, and it’s yet to be seen whether Tesla (NASDAQ: TSLA) will continue its recovery next week.
Bitcoin is trading at $22.3k, down over 5% in the past 24 hours. Its 7-day performance is still bullish, up over 8% in the past seven days. With a current 24-hour trading volume of $30.9 billion, down 11%, the cryptocurrency holds current support levels relatively well.
Bitcoin’s price will likely attempt and hold support at the $21-22k level this weekend before attempting another bull run next week. Bitcoin may attempt to breach the $25k level next week if the stock market opens in the green on Monday.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
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