- Investors pile into the US tech sector, sending the NASDAQ 100 index higher
- Bitcoin’s rally should continue on the back of the bullish tech sector&
- A divergence with the NASDAQ 100 index shows more upside potential for Bitcoin
Tech sector investors are in a frenzy, as they piled into tech companies in a rush not seen for a few years. After correcting for most of 2022, NASDAQ 100, the stock market index representing the US tech sector, is on fire.&
It gained over 30% YTD and looks bullish.&
A combination of factors led to the bullish movement, such as the AI revolution or the cost-cutting measures announced by companies such as Meta or Amazon. The fear of missing out drove investors into tech stocks again, culminating in NVIDIA’s stock price reaching a level that put the company into the $1 trillion market capitalization select club.&
For cryptocurrency traders, these are great news. In particular, Bitcoin looks like it is about to push even higher, despite gaining more than 65% YTD.
Bitcoin’s price action lags behind&
Bitcoin has been long traded in a tight, positive correlation with the NASDAQ 100 index. So, for example, while the tech sector index entered bearish market territory last year, Bitcoin followed.&
Moreover, after the NASDAQ 100 index bottomed in late October 2022, Bitcoin followed too.&
Furthermore, this year, the price action was identical, up to a point. That is, they both rallied at the start of the year. Next, a correction followed for both the NASDAQ 100 index and Bitcoin.&
But then they diverged because the tech sector index’s rally continued while Bitcoin price corrected. However, given the positive correlation between the two, one may state that it is only a matter of time before Bitcoin will make a new higher high for the year, providing the tech sector’s rally continues.&
The post Nasdaq 100’s price action indicates more gains for Bitcoin appeared first on CoinJournal.
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