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| 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.