The Nasdaq And Bitcoin Are On The Verge Of Giving Sell Signals As Joe Biden Looks To Eliminate Capital Tax Gains Breaks For Many

We’ll see what happens, but the Nasdaq and Bitcoin are on the verge of giving sell signals. At the same time, some things are now completely breaking away from the stock market and are likely to go up no matter what happens with them. First, though, take a look at the price of Bitcoin.

Bitcoin had an epic run from the start of October when it was $10,000 “a coin” up until it briefly went above $63,000 last week. That run has attracted countless people to open up new trading account apps on their phone for the first time to get on board and others to jump into crypto-related stocks to try to play the gain. At the same time, crypto promoters have been giving wild predictions for future price gain targets.

However, as I have said over and over again, crypto is not a safe haven asset that acts as a buffer again inflation. What it functions as is an instrument of speculation that is most closely correlated to the Nasdaq 100. When it goes up Bitcoin soars and when it corrects Bitcoin and other crypto coins crash.

Now it appears that Bitcoin has peaked out and it has support at $50,000. It dumped 7% yesterday and is now close to breaking that key psychological point. If it does don’t be shocked if crypto speculators go through hell in the next few weeks. Watch this level, because if Bitcoin goes below it then we will have a giant warning sign on the Nasdaq. My target for Bitcoin would be its 200-day moving average at $35,000.

In February, when crypto had a pullback after hitting $57,000 the Nasdaq also fell a bit over 11% into March. However, that pullback caused a lot of popular fad stocks to fall two to three times as much. The ARKK ETF that is made up of many of them fell 29%. Stocks that lag on rallies dump on mere market pullbacks.

Right now the S&P 500 and DOW are extremely overbought. The RSI on the S&P 500 went above 70 last week. However, the Nasdaq is lagging both of those averages. In March, when the Nasdaq fell over 11% the S&P 500 didn’t even drop 4%. We are still seeing a “great rotation” in the markets out of last year’s fad winners and into new things. If we do indeed get a sell signal on the Nasdaq that process is going to speed up.

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