Can the “Elon effect” reduce the selling pressure from early Bitcoin investors?

Since Tesla announced the purchase of Bitcoin in February, it seems to have affected the Bitcoin market in many ways. At present, many institutions have already purchased Bitcoin. As a result, Musk’s influence is being regarded as the “Elon effect” by many, and it has also played an important role in affecting the market operations.

This billionaire’s tweets about cryptocurrencies have become a price pump. Most of them are about Dogecoin and Bitcoin. Before the price of cryptocurrency reaches its peak, his Twitter posts can amplify the bullish sentiment or bearish sentiment, the price of cryptocurrency will either rise sharply or fall slightly.

However, in fact, the more important point is that Musk has influenced early investors in the market and forced them to suspend their traditional selling habits.

According to the on-chain analyst, early investors liked to sell their accumulated bitcoins in the middle of the bitcoin rally, but this time, the situation changed differently.

“Early investors like to sell cryptocurrencies in each rally to make a profit, which will lead to an increase in the average dormancy time. When Elon Musk came over and decided to purchase, the early investors and many of us hold Bitcoin firmly.”

The arrival of Elon Musk kept the whales calm, perhaps forcing them to pay attention to when there is a major turnaround.

Glassnode pointed out that due to the “Elon effect”, the selling pressure of mining companies has stopped. Bitcoin miners have abandoned the usual selling model and suspended the transactions because they expect the Bitcoin market to rise. Thus, they hold some cryptocurrencies as a reserve.

In addition, affected by the Elon effect, cryptocurrencies are becoming more widely accepted as financial assets. At present, many people believe that Bitcoin has been used as a hedging tool from the possible decline in the stock market. If the stock market crashes, then Bitcoin or gold-like cryptocurrency assets can provide a certain degree of security.