Tesla’s decline accelerated on Tuesday as investors turned away from high-profile tech names.
Shares of the electric vehicle maker were down as much as 13 percent – the stock’s worst day since September – before most of those losses recovered.
Tesla fell 8.55 percent on Monday, and the stock is now down more than 15 percent during the week, and with Tuesday’s losses, Tesla is negative for 2021.
The technology sector drove the market out of the defeat caused by the Coronavirus last year.
However, the prospects for new stimulus measures and a vaccine launch on a large scale have made the troubled and cyclical sectors more attractive to investors.
Tesla is on the way to its third consecutive week of losses, as the stock has also broken below its 50-day moving average for the first time since November.
Moving averages are technical indicators used to determine momentum.
The company is also now exposed to Bitcoin price fluctuations after purchasing $ 1.5 billion of the cryptocurrency, and Bitcoin has fallen 10 percent in the past 24 hours to over $ 50,000 on Tuesday.
Tesla ended 2020 as one of the best-performing stocks of that year, and this momentum continued until 2021, when the stock reached an all-time high on January 25.
However, the stock has fallen 28 percent since that date.
Recall that Tesla is not the only technical name that faced selling pressure in the last sessions of trading.
The Nasdaq index fell on Monday by 2.5 percent, as Apple, Amazon, and Microsoft all fell by more than 2 percent, and the Nasdaq index increased those losses on Tuesday, down 1.7 percent.
Tesla’s stock price is now directly linked to Bitcoin’s price after the company invested $ 1.5 billion in the volatile cryptocurrency, according to analyst (Daniel Ives) Daniel Ives of Wedbush securities brokerage.
Ives said: Musk has now become attached to the Bitcoin story in the eyes of the street, and although Tesla made paper profits in its first month of ownership of digital gold, it comes with additional risks, as we saw on Tuesday.
“As Tesla dives into Bitcoin, Musk risks overshadowing the vision of the primary electric vehicle in the near term for investors,” he added.
Despite some concerns, Ives still believes Bitcoin is a smart move in time for the electric car maker.
Ives estimated that Tesla made more than $ 1 billion from its investment in cryptocurrency.