🚨🚨 Emergency News Alerts 😱😱
⚠️ Cautious!
🔥Bitcoin's 10% sell-off since June 7 is sending a warning sign to the broader stock market, according to Stifel strategist Barry Bannister.
✍️ In a Wednesday note, Bannister highlighted the strong correlation between bitcoin and the Nasdaq 100 since 2020 as the cryptocurrency shares characteristics as a speculative risk-on asset more than it behaves like "digital gold."
✍️ But while bitcoin has traded lower in June to around the $65,000 level, the broader stock market continues to hit new record highs driven by gains in mega-cap tech stocks like Nvidia and Apple.
✍️ Bitcoin's inability to hit new record highs suggests the stock market is likely to play catch-up as it's set to decline in line with the cryptocurrency, according to the note.
✍️ "Recently the weakening of bitcoin signals an imminent S&P 500 summer correction and consolidation phase," Bannister said.
Bannister isn't the only analyst on Wall Street taking stock market cues from bitcoin.
Fairlead Strategies founder Katie Stockton told CNBC on Monday that she, too, is tracking the broadening divergence between US tech stocks and bitcoin.
🔥 "When we see bitcoin pulling back in that framework and the Nasdaq 100 just forging higher, that concerns us to some degree, just short term," Stockton said. "We do sense that that divergence is something that will ultimately probably catch-up with the Nasdaq 100 Index as soon as people say 'well wait a second, Nvidia is maybe a little overstretched here."
