Recently, the sharp declines in the seven largest U.S. stock markets have raised concerns about their potential impact on Bitcoin prices.
In regular trading on August 5, these leading technology stocks, including giants such as Nvidia and Microsoft, lost a combined total of more than $650 billion in market value.
While there has been a slight recovery, further declines in these stocks could put more downward pressure on Bitcoin.
The correlation between stock market performance and cryptocurrency value is well-documented; when major tech stocks underperform, investor sentiment tends to shift away from alternative assets like Bitcoin.
This relationship becomes more important as the tech-heavy Nasdaq enters a major correction, which could spill over into the cryptocurrency market.
2. Impact and Analysis
1. The continued decline of the “Big Seven” will have a negative impact on Bitcoin.
While stocks are generally more resilient to market volatility, another drop in the “Big Seven” could have a negative impact on Bitcoin prices.
If big tech stocks like Amazon and Apple fall, investors will seek safety in riskier assets like Bitcoin, meaning a large capital flight from broader financial markets could drag down Bitcoin prices.
Pressure from technology stocks, coupled with special factors for cryptocurrencies, could cause Bitcoin prices to fall below the $50,000 mark again.
Bitcoin is down 32.32% from its previous all-time high, with the ongoing market downturn fueling speculation of a further drop to $40,000.
However, Bitcoin’s price drop is not isolated, and other factors affecting Bitcoin and cryptocurrency prices include the recent interest rate cut by the Bank of Japan and the active selling of ETH by market makers such as Jump Trading.#JumpTrading转移资产
2. Bitcoin has reached its lowest point in terms of macroeconomics.
Historical chart patterns on the monthly chart (Figure 1) suggest that a local bottom for Bitcoin may have been reached.
However, the extent of the current correction will largely depend on inflows into U.S. spot Bitcoin exchange-traded funds (ETFs).
The U.S. Bitcoin ETF has experienced net outflows for three consecutive days, with cumulative outflows exceeding US$148 million on August 6.
ETF inflows play an important role in the price increases of cryptocurrencies. In the case of Bitcoin, by the time it broke the $50,000 mark on February 15, ETFs accounted for about 75% of new investment in the world's largest cryptocurrency.
