Originally published on: August 07, 2024
The recent sharp decline in the “Magnificent Seven” tech stocks, including big players like Nvidia and Microsoft, has investors on edge. With over $650 billion in market capitalization lost in a single day on Aug. 5, these stocks are now posing a threat to Bitcoin’s price stability.
According to Akshay Nassa, founder of Chimp exchange, if the top tech stocks continue to falter, Bitcoin prices could face further downward pressure. The correlation between Bitcoin and tech stocks has become increasingly important as the tech-heavy Nasdaq enters a correction phase, potentially impacting the crypto market as well.
Alvin Kan, COO of Bitget Wallet, warns that another decline in the Magnificent Seven could spell trouble for Bitcoin, potentially pushing its price below the $50,000 mark. Factors such as the Bank of Japan’s interest rate cut and aggressive ETH selling from market makers like Jump Trading are further complicating the market dynamics.
While historical chart patterns suggest that a local Bitcoin bottom may be forming, the future trajectory will largely depend on inflows from US spot Bitcoin exchange-traded funds (ETFs). Recent data shows three consecutive days of net outflows from US Bitcoin ETFs, indicating a lack of investor confidence in the market.
ETF inflows have historically played a significant role in driving cryptocurrency prices higher, with Bitcoin seeing a surge in investments when ETFs accounted for 75% of new investments earlier in the year. As the market navigates through these uncertainties, it remains to be seen how Bitcoin will weather the storm.
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