Nasdaq, Bitcoin, Inflation – FinTwit Trends To Watch Next Week

Inflation has been the talk of town this past week, and it will likely remain a dominant theme in the week ahead. Inflation fears worsened after red-hot CPI data was released last Wednesday, and this intensified the Fed taper debate. Speculation that inflation is not-so transitory and that mounting price pressures will force the Fed to act – via tapering asset purchases and bringing forward interest rate hike guidance – has sent Treasury yields snapping sharply higher.

This has weighed negatively on tech-heavy stock indices like the S&P 500 and Nasdaq, but less so on the Dow Jones. Major cryptocurrencies like Bitcoin and Dogecoin nosedived, partly due to lack of hyping from Elon Musk, who announced on Twitter that Tesla will no longer accept Bitcoin as payment for its electric vehicles. What are FinTwit traders watching out for across these key market themes in the week ahead?

NDX – NASDAQ PRICE CHART: DAILY TIME FRAME (22 OCT 2020 TO 13 MAY 2021)

Nasdaq Price Chart

Chart by @RichDvorakFX created using TradingView

I pointed out when the Nasdaq extended its slide as bond yields spiked in response to Fed taper fears that the selloff was starting to look a bit overdone. The ascending trendline connecting the 02 November and 05 March swing lows will likely be crucial for Nasdaq bulls to maintain. Nearside technical support around the 12,930-price level is also highlighted by the 61.8% Fibonacci retracement level of the Nasdaq’s year-to-date trading range. Failure to maintain altitude here brings the 78.6% Fibonacci retracement level and 200-day simple moving average into focus.

Reclaiming the 50-day simple moving average could see some follow-through higher by the Nasdaq to test support-turned-resistance around the 13,715-price level before all-time highs are reconsidered. Stocks might continue to face headwinds if inflation fears linger and Treasury bond yields keep pushing higher. On the other hand, softer Treasury yields stand to alleviate some of the downward pressure felt by stocks and could open the door for the Nasdaq to rebound back higher.

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