Bitcoin’s Daring Dance with Nasdaq: A Comedy of Errors! 💃📉

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What to know:

  • Oh dear! Nasdaq has triggered a double top breakdown on Monday, giving BTC a rather gloomy outlook. 😱
  • It seems the bull momentum in both assets decided to take a holiday in December. How rude! 🐂💨

According to the ever-so-reliable Ecoinometrics, Bitcoin‘s (BTC) long-term recovery is as tied to Nasdaq’s upward trend as a diva is to her spotlight. 🌟

Alas, for our crypto enthusiasts, Nasdaq has pulled a rather dramatic bearish reversal, known as a “double top,” putting BTC’s 200-day simple moving average (SMA) support in a precarious position. 🎭

Bitcoin, the reigning monarch of cryptocurrencies, has taken a nosedive of over 10% in the last 24 hours, undoing Sunday’s price rally to a dazzling $95,000. At one point, it flirted with the 200-day SMA support at $82,587, as per the ever-so-reliable TradingView. 📉

The 200-day SMA is like the wise old sage of market trends, and falling below this level is often seen as a harbinger of doom. 😬

We can’t rule out the possibility of BTC’s price slipping below this long-term average, especially since Wall Street’s tech-heavy Nasdaq took a 2.2% tumble on Monday, triggering that pesky double top breakdown. 🎢

Now, the double top is a rather theatrical affair, comprising two peaks separated by a trough, taking about two to six weeks to form. The gap between the peaks must be equal to or less than 5%, with the spread between peaks and trough being at least 10%. Quite the mathematical ballet! 💃📊

These are merely guidelines, not rules; the backdrop is more important. The pattern should appear after a prolonged uptrend to be valid, which is precisely the case with Nasdaq. 🎨

Nasdaq has strutted its stuff with two peaks near $22,200 since mid-December, with a trough at $20,538. The index ended Tuesday below the trough support, confirming the double-top bearish reversal pattern. How dramatic! 🎭

According to technical analysis theory, the subsequent decline could be at least 70% of the distance between the peaks and the trough, meaning Nasdaq could plummet to a rather dismal 19,400. The historical failure rate of this pattern is 11%, according to the CMT’s analysis books. So, breakdowns lead to deeper losses more often than not. How delightful! 😏

Both Nasdaq and BTC have lost their bullish momentum in December and are now trading close to their respective 200-day averages. Quite the fall from grace! 😔

Below the 200-day SMA, the next support for Bitcoin is seen directly at the former record high (resistance)-turned-support at $73,757. Fingers crossed! 🤞

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2025-03-04 12:18