Tesla Plunges 14% To Two-Year Low On Record Bearish Volume

Tesla (TSLA) experienced a sharp 14.26% decline on June 5, 2025, extending its losing streak to two consecutive sessions with a cumulative 17.30% drop. This sell-off occurred on exceptionally high volume of 284 million shares, signaling strong bearish conviction.
Candlestick Theory
The June 5 session formed a long bearish candle closing near its low (284.70 vs. intraday low 273.21), decisively breaching the psychological $300 support level. This follows a bearish engulfing pattern on June 4, where prices failed to reclaim the $350 resistance despite an early attempt. Key support now rests at the March 2025 swing low of approximately $260, while the June 5 high of $324.55 and May’s $363 peak serve as new resistance zones.
Moving Average Theory
Tesla’s price has collapsed below all major moving averages, with the 50-day SMA ($315) crossing bearishly below the 100-day SMA ($330) in late May. The 200-day SMA ($290) is now being tested as support, having previously capped rebounds in April. This configuration indicates established intermediate and long-term downtrends. Recent closes under the 200-day SMA suggest further downside risk may materialize should this level decisively break.
MACD & KDJ Indicators
MACD (12,26,9) exhibits a bearish momentum acceleration, with the histogram expanding negatively since late May. Both MACD lines are deep in negative territory, confirming strong downward pressure. KDJ (9,3,3) shows the %K line (10.2) and %D line (15.8) entrenched in oversold territory under 20, though without bullish crossover divergence. These aligned readings suggest entrenched bearish momentum, though severely oversold KDJ levels warn of potential technical rebounds.
Bollinger Bands
The June 5 close near $284 positions Tesla below the lower Bollinger Band ($297), which typically signals oversold conditions. Bollinger Band width expanded dramatically during the sell-off, reflecting surging volatility. Historically, such expansions preceded short-term rebounds in Q4 2024, but the breach of the lower band without immediate recovery suggests dominant bearish control.
Volume-Price Relationship
The sell-off’s credibility is confirmed by surging volume: June 5’s volume was 187% above the 30-day average. Distribution patterns emerged in late May as rallies to $360 occurred on declining volume, while the breakdown below $340 featured expanding volume. This volume divergence warned of impending weakness, now validated by high-volume capitulation.
Relative Strength Index
The 14-day RSI reading of 28.6 indicates deeply oversold conditions, nearing the extreme lows seen during the August 2024 and March 2025 sell-offs. While this may precede technical bounces, similar readings persisted during extended declines in early 2024. The RSI’s failure to form bullish divergence despite new price lows suggests unresolved downward pressure.
Fibonacci Retracement
Drawing Fibonacci levels between the April high ($489) and January low ($173) shows critical thresholds. The recent breakdown occurred below the 38.2% retracement at $315, targeting the 50% level at $260. Confluence exists at this zone, combining the March swing low and 200-day SMA. A breach of $260 could open the 61.8% retracement at $224. Any recovery faces immediate resistance at the $315–$325 zone, aligning with the breached 38.2% level and the June 5 intraday high.
Confluence Points: Multiple indicators align at the $260–$290 support zone, including the 200-day SMA, Fibonacci 50% retracement, and the January–March consolidation floor. This concentration heightens its technical significance. Volume and RSI readings confirm capitulatory conditions, while KDJ and Bollinger Bands warn of oversold extremes.
Key Divergence: The lack of RSI bullish divergence despite new price lows contrasts with March’s reversal pattern, suggesting weaker rebound potential. Additionally, MACD’s continued bearish expansion diverges from KDJ’s oversold reading, reflecting momentum’s dominance over mean-reversion signals.
In summary, Tesla’s technical posture remains bearish despite oversold readings, with the $260–$290 zone serving as a critical inflection point. Conclusive recovery signals would require a volume-backed close above $315 to invalidate the breakdown.