Originally published on: August 07, 2024
The recent sharp decline in the “Magnificent Seven” tech stocks, including big names like Nvidia and Microsoft, has investors worried about the potential impact on Bitcoin prices.
These top-performing stocks lost a staggering $650 billion in market capitalization during regular trading on Aug. 5. While they have seen a slight recovery, experts like Akshay Nassa, founder of Chimp exchange, warn that another drop in these tech stocks could drag Bitcoin prices down with them.
Nassa highlights the strong correlation between Bitcoin and tech stocks, especially as the Nasdaq enters a significant correction. This looming threat could spill over into the crypto market, affecting prices across the board.
Alvin Kan, COO of Bitget Wallet, echoes these concerns, noting that a further decline in the Magnificent Seven could put pressure on Bitcoin’s price. Factors like the Bank of Japan’s interest rate cut and aggressive ETH selling by market makers like Jump Trading could exacerbate the situation.
Crypto analyst Rekt Capital suggests that the local Bitcoin bottom may have already been reached, based on historical chart patterns. However, the extent of the current correction will largely depend on inflows from US spot Bitcoin ETFs, which have recently experienced net outflows.
ETF inflows play a crucial role in driving cryptocurrency prices higher. In the case of Bitcoin, ETFs contributed significantly to its surge past the $50,000 mark earlier this year.
As investors brace for more volatility in the market, the potential impact of tech stock declines on Bitcoin prices remains a key concern. Will Bitcoin fall below the $50,000 threshold, or will it weather the storm and continue its upward trajectory? Stay tuned for more updates on this evolving situation.