Bitcoin breaks free while Nasdaq stumbles

By fklivestolearn | Technicity | 23 Jun 2023


The premier digital currency’s relationship with growth stocks is again in the limelight

 

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Bitcoin has exhibited a consistent upward trajectory throughout the week, surging by over 15% during this period. Interestingly, the same cannot be said for technology stocks and the Nasdaq, as they have experienced a slight decline since Monday. The unexpected disparity in price movements between these two highly correlated assets may seem unusual, but it is not entirely uncommon.

A visual representation of the diverging paths taken by Bitcoin and the Nasdaq 100 ($QQQ) since April can be observed in the chart above. While Bitcoin has witnessed a gradual decline, retracing to retest its pivot highs at $25,000, growth stocks have been on a remarkable upward surge. This pattern of divergence between the two has been observed in the past, notably in the late fall of the previous year and again during the summer of 2021.

A noteworthy observation from previous instances of divergence is that the asset that lagged behind eventually caught up with its counterpart. In the case of Bitcoin and the Nasdaq, last year saw the Nasdaq 100 catching down to Bitcoin, resolving the divergence and leading to a significant upward rally for both assets. Similarly, in 2021, Bitcoin caught up with the Nasdaq 100, bringing them back in line.

In the current scenario, there is a possibility that Bitcoin might once again catch up and realign itself with its growth stock peers. However, a critical test awaits Bitcoin at the $30,000 mark, which will likely determine its trajectory in the days to come. This upcoming hurdle presents a pivotal moment that could potentially shape the future movement of Bitcoin and its correlation with the broader market.

 Originally Published on Medium

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fklivestolearn
fklivestolearn

I am a prolific Blogger on Substack/Medium with my daily newsletter. Extensive trading experience in Forex & Stocks based on technical studies. Cryptocurrency trader and Enthusiast, Blockchain/Fintech Evangelist & generally just a Technology Freak.


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