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- Buyers pile into the US tech sector, sending the NASDAQ 100 index increased
- Bitcoin’s rally ought to proceed on the again of the bullish tech sector
- A divergence with the NASDAQ 100 index exhibits extra upside potential for Bitcoin
Tech sector traders are in a frenzy, as they piled into tech firms in a rush not seen for a number of years. After correcting for many of 2022, NASDAQ 100, the inventory market index representing the US tech sector, is on fireplace.
It gained over 30% YTD and appears bullish.
A mixture of things led to the bullish motion, such because the AI revolution or the cost-cutting measures introduced by firms corresponding to Meta or Amazon. The worry of lacking out drove traders into tech shares once more, culminating in NVIDIA’s inventory value reaching a stage that put the corporate into the $1 trillion market capitalization choose membership.
For cryptocurrency merchants, these are nice information. Specifically, Bitcoin seems to be like it’s about to push even increased, regardless of gaining greater than 65% YTD.
Bitcoin chart by TradingView
Bitcoin’s value motion lags behind
Bitcoin has been lengthy traded in a good, constructive correlation with the NASDAQ 100 index. So, for instance, whereas the tech sector index entered bearish market territory final yr, Bitcoin adopted.
Furthermore, after the NASDAQ 100 index bottomed in late October 2022, Bitcoin adopted too.
Moreover, this yr, the worth motion was similar, up to some extent. That’s, they each rallied at the beginning of the yr. Subsequent, a correction adopted for each the NASDAQ 100 index and Bitcoin.
However then they diverged as a result of the tech sector index’s rally continued whereas Bitcoin value corrected. Nonetheless, given the constructive correlation between the 2, one might state that it is just a matter of time earlier than Bitcoin will make a brand new increased excessive for the yr, offering the tech sector’s rally continues.