Bitcoin

Rekt (rektarb.xyz)

Rekt

The “Magnificent Seven” stocks have seen a sharp decline, threatening to bring more downward pressure on Bitcoin’s price.
The Magnificent Seven, a moniker for some of the top-performing tech stocks such as Nvidia and Microsoft, lost over $650 billion in cumulative market capitalization during regular trading on Aug. 5. 
Despite staging a slight recovery since, another potential decline in the top tech stocks could lead to lower Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) prices, according to Akshay Nassa, founder of Chimp exchange. Nassa told Cointelegraph:
<blockquote data-ct-non-breakable="true">
 “The correlation between stock market performance and cryptocurrency values is well-documented; as major tech stocks falter, investor sentiment generally shifts away from alternative assets, including Bitcoin.”
</blockquote>
The correlation between Bitcoin and tech stocks gained even more importance, as the tech-heavy Nasdaq has entered a significant correction, which could spill over into the crypto space, according to Nassa.
Related: <a href="https://cointelegraph.com/news/top-50-cryptos-lose-2024-gains-510b-selloff">$510B crypto sell-off wipes 2024 gains for top 50 coins</a>
<h2 id="could-bitcoin-dip-below-50-000-as-tech-stocks-struggle">Could Bitcoin dip below $50,000 as tech stocks struggle?</h2>
While stocks are generally more resilient to market volatility, another decline in the Magnificent Seven could hurt Bitcoin’s price, according to Alvin Kan, chief operating officer of Bitget Wallet.
Kan told Cointelegraph:
<blockquote data-ct-non-breakable="true">
 “If the Magnificent 7, including Amazon and Apple, are falling, investors would want some form of insulation from even more risky assets like Bitcoin. This means that the extreme capital flight in the broader financial market can also weigh in on Bitcoin’s price.”
</blockquote>
Pressure from tech stocks, along with other crypto-specific catalysts, could potentially threaten another dip below the $50,000 mark, explained Kan:
<blockquote data-ct-non-breakable="true">
 “The ongoing market slump, accounting for a 32.32% drop from the former all-time high for Bitcoin, has reignited the speculations of a further drop to $40,000… However, the price of Bitcoin is not crashing in isolation.”
</blockquote>
Other factors influencing Bitcoin and crypto prices include the Bank of Japan’s latest interest rate cut, along with “<a href="https://cointelegraph.com/news/market-makers-sold-300m-ether-august-2024">aggressive” Ether selling from market makers</a> like <a href="https://cointelegraph.com/news/jump-trading-sells-29m-ether-bottom-near">Jump Trading</a>, Kan added.
Related: <a href="https://cointelegraph.com/news/marathon-digital-bitcoin-holdings-july-2024">World’s largest Bitcoin miner increased BTC holdings by $124M in July</a>
<h3 id="the-macro-bitcoin-bottom-is-in-according-to-analyst">The macro Bitcoin bottom is in, according to analyst</h3>
The local Bitcoin bottom may be in, according to historical chart patterns on the monthly chart, analyzed by pseudonymous crypto analyst Rekt Capital.
The analyst <a href="https://x.com/rektcapital/status/1820912925911007381/photo/1" target="_blank" rel="noopener nofollow">wrote</a> in an Aug. 6 X post:
<blockquote data-ct-non-breakable="true">
 “We are here (orange circle).”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/b1407656-1eb3-4119-93b1-74e6913beb40.jpeg" alt="Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500B loss " title="">
 <figcaption style="text-align: center;">
 BTC/USD, 1-month chart, macro bottom. Source: Rekt Capital
 </figcaption>
</figure>
However, the extent of the current correction will mainly depend on the inflows from the United States spot Bitcoin exchange-traded funds (ETFs).
The US Bitcoin ETFs have recorded three consecutive days of net outflows, with over $148 million worth of cumulative outflows on Aug. 6, according to Farside Investors <a href="https://farside.co.uk/?page_id=997" target="_blank" rel="noopener nofollow">data</a>.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/21cd5f9b-ee9b-47d9-8a6c-56dff30cb275.png" alt="Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500B loss " title="">
 <figcaption style="text-align: center;">
 Bitcoin ETF Flow (USD, millions). Source: Farside Investors
 </figcaption>
</figure>
<a href="https://cointelegraph.com/explained/what-are-etf-fund-flows-and-why-do-they-matter">ETF inflows</a> can significantly contribute to a cryptocurrency’s price appreciation. For Bitcoin, ETFs had accounted for about <a href="https://cointelegraph.com/news/bitcoin-etfs-about-75-new-investment">75% of new investment</a> in the world’s largest cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-price-prediction-ethereum-altcoins-crypto-trader-roman-hall-of-flame-cointelegraph/">Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman</a>

Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500B loss

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Cointelegraph

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