Bitcoin was down 10% Thursday as of press time and going as low as $47,720 around 01:00 UTC (9 p.m. ET). The world’s largest cryptocurrency by market capitalization was below the 10-hour moving average and the 50-day, a bearish signal for market technicians.

One fundamental reason for bitcoin’s drop: Tesla. Bitcoin’s price has been in a very defined range over the past two weeks but the electric car maker’s announcement Wednesday that it would stop accepting BTC because of environmental issues related to bitcoin mining led to immediate selling that spilled into the next day.

“What saddens me is the way the weak hands and recent buyers see Elon Musk as a prophet, powerhouse and decisive figure in bitcoin,” said Henrik Kugelberg, a bitcoin over-the-counter trader. 

Bitcoin’s price has tumbled 17% since Sunday, on track for the worst weekly performance since February. 

“The BTC chart structure is very weak and there is not any significant positive trigger for BTC to move higher,” said Delta Exchange CEO Pankaj Balani.

Some analysts lament Musk’s ability to sway crypto prices, with even dogecoin (DOGE) at his mercy. 

DOGE is down 32% so far this week, after the price failed to pump when the billionaire entrepreneur appeared as host of the long-running comedy show “Saturday Night Live.”  

“If anything, what this is revealing is the sensitivity of the new money in the space,” said Vishal Shah, founder of derivatives exchange Alpha5. “Right now, the drivers are mostly macro, and hence correlation to other assets is back in the cards.”

Tesla’s stock is down 3.1%. Its 2021 performance has been poor, down over 22% so far.

In the bitcoin derivatives market, it appears traders are doing less hedging. A Forbes article Thursday points to traders cashing out short positions on CME as bitcoin fell. 

Data from Skew also suggests a large number of sell liquidations on the futures market occurred during the past 24 hours, maxing at over $400 million in selling around 22:00 UTC (6 p.m. ET) Wednesday.

However, traders may want to start hedging more often because Delta Exchange’s Balani expects choppy waters ahead for crypto. 

“Now there is a clear negative trigger that can lead to a large correction in BTC and altcoins,” he said. “Given a breakdown of crucial support levels in BTC, volatility in BTC and alts is going to be higher.” 

Ether, the second-largest cryptocurrency by market capitalization, was trading around $3,651 as of 21:00 UTC (4:00 p.m. ET), down 10% over the prior 24 hours. The asset is below the 10-hour moving average as well as the 50-day, a bearish signal for market technicians. 

Despite the drop, there is at least one long-term fundamental positive for ether: The use of decentralized finance, or DeFi, on Ethereum. According to data aggregator Dune Analytics, Wednesday was the highest volume day in the past month for decentralized exchanges, or DEXs. Uniswap, as usual, led the way with $3.7 billion in volume.

While the market may be dipping and volatility may crop up, Simon Peters, an analyst at multi-asset investment platform eToro, is focused on the core technologies of crypto and the value they may unlock for a bull case over the long haul. 

“For many crypto assets such as bitcoin and ethereum, the long-term story has not changed,” said Peters. “This emerging asset class continues to revolutionize many aspects of financial services. And while nothing goes up in a straight line, the long-term fundamentals for crypto assets remain as solid as ever.”

Despite a down crypto day, analysts expect altcoins to continue to flourish. 

“Overall, the market is now being driven by alternative assets that are able to innovate faster than bitcoin and ethereum,” said Michael Gord, chief executive officer of quant firm Global Digital Assets. “This provides a massive opportunity for new networks to test and build innovations faster that bring over value away from bitcoin and ethereum.”

Technical analyst Katie Stockton from Fairlead Strategies likes stellar (XLM) and cardano (ADA), while she is bearish on dogecoin. “Note that dogecoin has assumed an unfavorable trajectory relative to bitcoin over the past week, while stellar and cardano have the best short-term relative strength outlooks,” she said.  

Digital assets on the CoinDesk 20 are mostly in the red Thursday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

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