Bitcoin's Nasdaq Ties: A Double-Edged Sword

Bitcoin's Correlation with Nasdaq: A Double-Edged Sword

Bitcoin's recent price movements have been closely tied to the tech sector, particularly the Nasdaq, raising concerns about its resilience amid market volatility. Standard Chartered's Geoffrey Kendrick has advised investors to "buy the dip" in Bitcoin, citing its increasing correlation with the Nasdaq. However, this relationship also highlights the risks associated with Bitcoin's exposure to tech sector shocks.

Bitcoin's Nasdaq Correlation: A Closer Look

According to a statement to The Block, Bitcoin remains more closely tied to the Nasdaq than to traditional safe-haven assets like gold. A recent 3% drop in Nasdaq futures, spurred by DeepSeek-related news, led to significant overnight crypto liquidations. This reinforces the narrative that Bitcoin's price movements are increasingly influenced by the tech sector.

The 3.3% decline in Nasdaq 100 futures ahead of the U.S. market opening further underscores this connection. Notably, Nvidia saw a 13% pre-market drop after DeepSeek—a Chinese AI startup—unveiled its flagship AI model, R1, which rivals OpenAI’s capabilities at a lower cost. Such tech-related shocks can spill over into Bitcoin, as demonstrated by the recent liquidation events.

Potential Impacts on Bitcoin's Price

Kendrick cautioned that further Nasdaq liquidation during the U.S. session, compounded by upcoming earnings reports from Microsoft, Meta, and Tesla, could push Bitcoin closer to critical levels. He identified $96,400—the average purchase level for BTC ETFs since the U.S. election—as a key threshold to watch. If Bitcoin approaches this level, market sentiment could shift significantly.

Adding to this, Kendrick pointed to potential disappointment from the Federal Open Market Committee (FOMC) meeting later this week. Hawkish signals or unexpected policy shifts could exacerbate both Nasdaq and Bitcoin’s downward trends.

Trump's Crypto Executive Order: A New Layer of Complexity

Last week's crypto executive order from the Trump administration added another layer of complexity. The order tasks a working group with evaluating a national digital asset stockpile. However, Kendrick expressed disappointment over the terminology, suggesting "stockpile" implies