Bitcoin has recently been watching the Nasdaq, not the crypto market. And the Nasdaq has now fallen for four straight weeks.
Picture this: It’s a quiet weekend on your screen. BTC is hovering around $75,000, and you might even think it’s a boring weekend. But in the next room, U.S. stocks have just seen their worst tech sell-off in over a year. The Nasdaq fell 3.37% for the week, the S&P 500 dropped 2.68%, and it was the Nasdaq’s fourth consecutive weekly decline.
Then Friday’s nonfarm payrolls report came out: 165,000 new jobs, versus expectations of just 65,000, and unemployment fell to 4.1%. Good news? Not in this environment. The probability of a December rate hike jumped from around 67% to 77–80%, the U.S. Dollar Index rose 0.6–0.7% in a single day—its biggest gain in seven weeks—and data from on-chain analytics firm CryptoQuant showed that Bitcoin holders realized more than $2 billion in losses over three days.
What does this have to do with you? The chain of events is pretty short: rate hike expectations rise, the dollar gets stronger, tech stock valuations get squeezed, and BTC’s recent correlation with the Nasdaq is around 0.76. In simple terms, the Nasdaq is now holding half the steering wheel for crypto prices. What’s more, ETFs saw net outflows of about $1.28 billion over five days, and stablecoin liquidity is shrinking. It’s like the tide slowly going out while you’re still standing on the beach, feeling the sand loosen beneath your feet.
I want to point out one counterintuitive detail: U.S. stocks rebounded on Friday, but BTC didn’t follow. It gets left behind on the way up, but falls alongside them on the way down. That kind of asymmetry is what I dislike most. If U.S. stocks pull back again next week and buyers still don’t show up in crypto, the $70,000 area could be put to the test. Of course, I could be wrong: the 2-year Treasury yield fell after hours, suggesting the bond market hasn’t fully bought into the rate-hike story.
If it were me, I’d do three small things this weekend: reduce leverage to a level where a quick wick-out wouldn’t keep me up at night; mark next week’s CPI release and Fed officials’ speeches on my calendar; and decide whether I’ll stick to my plan if BTC drops below my stop-loss—or hesitate again. Don’t wait until 3 a.m., when a liquidation alert jolts you awake, to start thinking about this.
The market won’t tell you in advance when the wind has shifted. It’ll just make the unprepared pay tuition.
A question for you: Can your current position withstand another week of Nasdaq losses?
Personal opinion, NFA, DYOR.
$BTC $ETH
Picture this: It’s a quiet weekend on your screen. BTC is hovering around $75,000, and you might even think it’s a boring weekend. But in the next room, U.S. stocks have just seen their worst tech sell-off in over a year. The Nasdaq fell 3.37% for the week, the S&P 500 dropped 2.68%, and it was the Nasdaq’s fourth consecutive weekly decline.
Then Friday’s nonfarm payrolls report came out: 165,000 new jobs, versus expectations of just 65,000, and unemployment fell to 4.1%. Good news? Not in this environment. The probability of a December rate hike jumped from around 67% to 77–80%, the U.S. Dollar Index rose 0.6–0.7% in a single day—its biggest gain in seven weeks—and data from on-chain analytics firm CryptoQuant showed that Bitcoin holders realized more than $2 billion in losses over three days.
What does this have to do with you? The chain of events is pretty short: rate hike expectations rise, the dollar gets stronger, tech stock valuations get squeezed, and BTC’s recent correlation with the Nasdaq is around 0.76. In simple terms, the Nasdaq is now holding half the steering wheel for crypto prices. What’s more, ETFs saw net outflows of about $1.28 billion over five days, and stablecoin liquidity is shrinking. It’s like the tide slowly going out while you’re still standing on the beach, feeling the sand loosen beneath your feet.
I want to point out one counterintuitive detail: U.S. stocks rebounded on Friday, but BTC didn’t follow. It gets left behind on the way up, but falls alongside them on the way down. That kind of asymmetry is what I dislike most. If U.S. stocks pull back again next week and buyers still don’t show up in crypto, the $70,000 area could be put to the test. Of course, I could be wrong: the 2-year Treasury yield fell after hours, suggesting the bond market hasn’t fully bought into the rate-hike story.
If it were me, I’d do three small things this weekend: reduce leverage to a level where a quick wick-out wouldn’t keep me up at night; mark next week’s CPI release and Fed officials’ speeches on my calendar; and decide whether I’ll stick to my plan if BTC drops below my stop-loss—or hesitate again. Don’t wait until 3 a.m., when a liquidation alert jolts you awake, to start thinking about this.
The market won’t tell you in advance when the wind has shifted. It’ll just make the unprepared pay tuition.
A question for you: Can your current position withstand another week of Nasdaq losses?
Personal opinion, NFA, DYOR.
$BTC $ETH