Bitcoin And Nasdaq Speculation: It’s The Same Trade, Stupid

By Mish Shedlock of MishTalk
Monday, August 5, 2024 6:34 PM EDT

(Click on image to enlarge)

Gold, Bitcoin, Nasdaq Today

  • Bitcoin is down $5,061 to $53,710 That’s a decline of 8.5%with extreme volatility.
  • Nasdaq Index is down 550 to 16,235. That’s a decline of 3.3%
  • Silver and copper (industrial commodities) are down 4.0 and 3.6%respectively.
  • Gold is down $20 to $2,248. That’s a decline of about 0.85%.

The above numbers are roughly 12:27 PM Mountain Time with silver and copper quotes about 12:40 PM.

Gold, Bitcoin, Nasdaq From Recent Highs

  • Bitcoin $71,101 to $53,554: -24.7%
  • Nasdaq 18,648 to 16,101: -13.7%
  • Silver $32.10 to $27.20: -15.3%
  • Copper $5.11 to $3.99: -21.9%
  • Gold $2,492 to $2,448: -1.8%

Bitcoin dip buyers came in at weak technical support at just under $50,000. It bounce to as high as $55,550 a nice bounce if you caught it.

But as I type (roughly 12:56) it’s back to $53,298 down about 9.3% in the past 24 hours.

Technically speaking, If Bitcoin breaks today’s low, then today’s dip buyers are likely to exit leading to further acceleration to the downside.

Support is ~42,000 so don’t be surprised if it gets there.

Looking Ahead

Looking ahead, the stock market is still grossly overvalued.

However, the VIX (volatility index) if so high (at 36.1 up an amazing 55% today), we can see a bounce anytime (or not).

Crashes generally happen from oversold conditions so we shall see.

Key Points

if Bitcoin continues to track the Nasdaq with increased volatility, it can get very ugly. That’s what I expect, for both.

Bitcoin represents speculative mania, not the next global currency.

Rate Cuts Coming

Also on August 3, I commented Big Changes in Fed Interest Rate Cut Expectations This Year and Next

Rate Expectation Percentage Point Change

  • Sep 2024: -0.13 PP to 4.94% (-0.43 PP from current) 1.7 quarter-point cuts
  • Nov 2024: -0.30 PP to 4.53% (-0.83 PP from current) 3.3 quarter-point cuts
  • Dec 2024: -0.34 PP to 4.21% (-1.16 PP from current) 4.6 quarter-point cuts
  • Jan 2025: -0.36 PP to 3.98% (-1.39 PP from current) 5.6 quarter-point cuts
  • Mar 2025: -0.38 PP to 3.71% (-1.66 PP from current) 6.6 quarter-point cuts

Recession Has Started

On July 8, I wrote Weak Data Says a Recession Has Already Started, Let’s Now Discuss When

I’ve seen enough. A recession has started. Let’s discuss starting with a very good indicator that has few false positives and no false negatives.

My follow-up post was on August 2.

August 2: The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered

A recession indicator based off rising unemployment triggered in July. Claudia Sahm, a former Fed economist, takes credit for an indicator she did not invent. Let’s discuss.

Weakening data explains the recession call. Yield curve action provides a confirmation signal.

Global selloffs add to recession risks. Sentiment matters.

Don’t expect the Fed to bail out speculative mania. Markets generally fall after the first rate cut. This decline ahead of time caught most off-guard.

Addendum: By Any Chance, Does Bitcoin Fix This?

More By This Author:

ISM Services PMI Rebounds But It Won’t Last
Margin Calls Trigger Huge Global Equities and Bitcoin Selloff, Gold Fine
Are The “Magnificent 7” Stocks Today’s Version Of The “Nifty Fifty”?

Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment advice. All site content, including ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments