$Bitcoin(BTC.CC)$ traded below the psychologically important $40,000 mark after three months in the early hours of Wednesday as the cryptocurrency sell-off fueled by $Tesla, Inc.(TSLA.US)$ CEO Elon Musk’s remarks last week deepened.

What Happened

The apex cryptocurrency by market cap traded 13.73% lower at $39,284.33 at press time on a 24-hour basis and has declined 31.63% on a seven-day trailing basis. BTC touched an intra-day low of $39,034.08.

From its all-time high of $64,863.10, which it charted a month ago. BTC has fallen 39.13% as of press time.

Similarly, $Ethereum(ETH.CC)$, the second-largest cryptocurrency by market capitalization, traded below the $3,000 mark at press time.

At press time, on a 24-hour basis, ETH traded 16.56% lower at $2,934.12. The cryptocurrency has fallen 31.67% over a seven-day trailing basis. ETH touched an intra-day low of $2,881.09.

Why It Matters

Cryptocurrency investors are grappling with “extreme fear,” according to the “Crypto Fear & Greed Index,” a measure of emotions and sentiments.

Last week, the measure had termed the market to be in a state of “Greed.” 

The state of the cryptocurrency markets changed significantly after Musk said Tesla would stop accepting BTC payments citing environmental concerns.

On Monday, Musk engaged in a war of words with Bitcoin followers on Twitter and at one point said he wanted to go “all in on”$Dogecoin(DOGE.CC)$.  

DOGE traded 20.14% lower at $0.40 at press time over a 24-hour period. In the same period, the meme coin has dropped 7.69% and 4.13% respectively against BTC and ETH.

Glassnode said Monday that Musk’s tweets have led to “widespread confusion” and a “bifurcation of reactions.” While new investors are panic selling, long-term ones remain unfazed.