The crypto hit a three-month low as investors sold cryptocurrencies as Tesla boss Musk hinted over the weekend that the carmaker may have already sold some of its bitcoin holdings

Bitcoin reached a three-month low on Monday as investors sold cryptocurrencies in the wake of Tesla boss Elon Musk’s hinting over the weekend that the carmaker is considering or may have already sold some of its bitcoin holdings.

Musk has boosted crypto markets with his enthusiasm for the asset class, but has lately roiled trade by appearing to cool on bitcoin in favour of dogecoin. The gyrations are beginning to spook even steeled traders.

This has gone from clear FOMO (fear of missing out) to fear of not getting out, and you’re seeing a lot of people dumping, said Chris Weston of brokerage Pepperstone in Melbourne, adding that he was looking at the 200-day moving average just below $40,000 as the next key test for bitcoin.

Why would I want to buy bitcoin right now — even if I’m bullish — until the liquidation is over and you see some consolidation in price?, he said.

Bitcoin dropped more than 9% on Monday to as low as $42,185, its lowest since Feb. 8, while ether, linked to the ethereum blockhain, declined even more to $3,123.94. Dogecoin shed nearly 7% to $0.48, and all three are well under recent records.

On Wednesday, Musk said Tesla would stop taking bitcoin as payment, owing to environmental concerns about energy use to process transactions. Defending that decision on Sunday, he suggested Tesla may have sold its own holdings.

On Tuesday, Reuters reported Tesla is seeking to enter the multi-billion dollar U.S. renewable credit market, hoping to profit from the Biden administration’s march toward new zero-emission goals.

Dogecoin is also yet to fully recover from Musk describing it as a “hustle,” although he did boost the price last week by saying he was working to improve its efficiency.

For an asset class that has surged this year, with dogecoin up about a hundredfold, ether up more than fourfold and bitcoin gaining 45%, some are beginning to call time on the wild ride.

Our weekend trading has kicked up, and we’re looking at some serious liquidations through the exchanges, said Pepperstone’s Weston.

I am closing the short-bitcoin/long-ethereum trade and moving to the sidelines, he added. I feel the dust really needs to settle here.