Bitcoin lags as tech-heavy Nasdaq recovers strongly

While the stock market recovered strongly last week, Bitcoin is lagging behind. The Nasdaq 100 is up 4.2%, but Bitcoin is down 2.28% and stands at around $62.300 at the time of writing. Analyst Daan from the crypto market community sees a clear liquidity rotation as the cause: money is flowing back from crypto to technology stocks.

Bitcoin is available at OKX and Bybit.

In brief:

• Bitcoin falls 2.28% while the Nasdaq 100 rises 4.2%
• An analyst points to liquidity rotation from crypto into recovering technology stocks
• For Bitcoin to recover, a sideways stock market would be more ideal, according to the analyst

Crypto loses ground to recovering tech exchange

Late last week, technology stocks rallied strongly after a period of heavy losses. Some popular memory and chip-related stocks had already fallen more than 50% in the weeks before. During that decline, crypto acted as an alternative speculative vehicle and attracted money from investors seeking returns.

Now that those stocks are picking up again, the money is returning to the stock market. Daan explains this pattern in his analysis and says it is not a new phenomenon. Crypto has underperformed for some time whenever there is a great deal of movement in traditional markets, because that movement attracts speculators who would otherwise have put their money into digital coins.

A sideways stock market would help Bitcoin

Daan notes that in the short term there is still some correlation between Bitcoin and the stock market, but the relationship is not straightforward. In the current climate, a calm, sideways stock market would actually be more favourable for Bitcoin than a sharp rise in equities. The more action there is in the stock market, the more capital and attention shifts towards it.

The Bitcoin price is currently moving little and stands at around $62.255, a decline of 1.7% in the past 24 hours. Investors who had already put their Bitcoin in motion will now see it lose value while stocks are turning green. Once the stock market cools down again, that speculative capital could once again flow in the direction of crypto.