Bitcoin has morphed into a pure-play levered risk trade, specifically the technology trade. The correlation with the Nasdaq has moved to nearly 1:1.
That's the case once again today with bitcoin down 5.6% and the Nasdaq down 1.8%. Within the Nasaq, the high-flying chipmakers, Tesla and big-cap tech are getting hit particularly hard.
With today's drop $2400 drop, bitcoin has given back nearly all the rally since mid-March. If that's where the Nasdaq is headed, it would argue for another 7% decline.
For bitcoin itself, this had looked like a positive breakout from a period of consolidation in the $33,000-$45,000 range but that's been invalidated. It would be further damaged if $40,000 gives out but there's still plenty for the bulls to like. So long as it can hold above $37,500, the series of higher lows will continue.
