Bitcoin surged past $40,000 for the first time in two weeks after Tesla CEO Elon Musk said the electric-car maker would accept the cryptocurrency as an alternative payment subject to miners meeting environmental standards.
The bitcoin price was $40,187 as of 13:09 coordinated universal time (9:11 a.m. ET), up 12% over the past 2 hours, according to CoinDesk 20 data.
Buyers stepped in on Sunday after Musk tweeted that Tesla will allow bitcoin transactions again “when there’s confirmation of reasonable (50%) clean energy usage by miners with a positive future trend.”
“Musk’s latest tweet is net positive for bitcoin because it not only gives a benchmark for Tesla to deem the cryptocurrency carbon neutral, but it will force mining groups to publicize information, therefore making the entire mining operations more transparent and environmental, social and governance friendly,” Nick Mancini, a research analyst at Trade the Chain, said.
“It will put the juice to the upside,” Brian Tehako, executive director of Trading Desk Operations at the digital-assets market maker Hehmeyer, told CoinDesk in a Telegram chat. “Our five-day simple moving average crossed through the 20-day average [a bullish development]. The market could rise to $41,900.”
The widely tracked 200-day simple moving average (SMA) resistance is currently located at $42,484, according to technical analysis data source TradingView.
Tesla announced bitcoin as a payment option in February, only to suspend it early May on environmental concerns.
While the market mood has improved in the past 24 hours, caution ahead of the U.S. Federal Reserve rate decision, due Wednesday, may keep gains in check.
The Fed’s liquidity-boosting monetary policy has come under fire in recent weeks, with former central bank officials, economists and market participants calling it inappropriate amid inflation concerns.
“Rather ironic to live whining about the Fed, yet without the Fed and its expansionary policies, the price of bitcoin would be 90% lower,” trader and analyst Alex Kruger tweeted.