Recently, major US stock indices reached new 52-week highs, with the Nasdaq approaching its previous all-time high. Some key components of the index, such as Nvidia, have set new price records. However, Bitcoin and other cryptocurrencies remain stagnant.
In this article, we will explore why the lack of excitement in Bitcoin could eventually lead to a surge in its value, surpassing the Nasdaq. But before that happens, Bitcoin could reach approximately $47,000 per coin.
Capital Flows Elude Crypto Market, But History Suggests It’s Coming
In financial markets, capital flows in and out of different assets at different times. The concept of sector rotation in the stock market suggests that profits from the tech sector, during a market bottom, start flowing into industrials. This shift is already starting to occur.
Since crypto is not a sector of the stock market, it is not featured on the sector rotation chart. However, the recent relationship between the Nasdaq and Bitcoin indicates that tech-related capital could flow into crypto.
NDX leads BTC for weeks before the relationship changes | BTCUSD on TradingView.com
The above chart highlights how Bitcoin often lags behind the Nasdaq for weeks. However, once the divergence ends, BTCUSD catches up and surpasses the Nasdaq to reach a new speculative peak. If this pattern repeats, it could happen in a matter of weeks.
Bitcoin Could Rise to $47,000 If It Follows the Stock Market
If this pattern repeats again, Bitcoin could begin a bullish rally. According to the chart below, it has a significant amount of catching up to do.
A comparable rally would take BTC to $47,000 | BTCUSD on TradingView.com
The Nasdaq is currently trading at around the 15,000 level—similar to where it was in late March 2022, just before the bear market began. If Bitcoin can recover to a similar level at that time, BTCUSD could soon trade closer to $47,000 per coin. While there is no guarantee that the relationship will follow the same path as previous instances, as long as crypto does not collapse further, Bitcoin could outperform tech stocks significantly.
The chart above appeared in issue #8 of CoinChartist VIP alongside a dozen other exclusive crypto charts. Click here to learn more.
