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Bitcoin is dancing to the beat of tech stocks, which are also heading lower.
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International tension increases due to possible war between the United States and Iran.
The price of bitcoin (BTC) is at levels that would have seemed unthinkable three months ago.
At the time of this publication, as seen in the NoticiasVE price calculator, bitcoin is trading for $72,500. The digital currency is one step away from the psychological barrier of $70,000, which could act as a support zone.
The following graph shows How has BTC behaved in the last 12 months:
This behavior of bitcoin is not an isolated phenomenon, but rather responds to a strong correlation with the US technology stock sector.
Los Wall Street traders are runningAccording to a Bloomberg analysis, a «asset rotation»moving away from the tech giants that were previously considered safe bets to pursue other opportunities or retreat into cash. This has left risk assets – often including bitcoin – under considerable selling pressure.
The fall in the price of bitcoin has been deepened by the collapse of the Nasdaq 100 index, which fell more than 1.5% after a wave of massive sales in chip manufacturers and software companies.
For Matt Malley, from the Miller Tabak company, it would not be unusual for the fall to extend to the entire stock market:
Of course, we’ve been saying for some time that if the tech sector sees a widespread decline, with all the different groups within the sector falling in unison, it’s going to be very difficult for the stock market in general to sustain itself in that type of scenario.
Matt Malley, CEO of Miller Tabak
In this scenario of risk aversion within the technology sector, bitcoin has extended its downward trend, “swimming” in favor of a macroeconomic trend that today punishes the technology sector.
It cannot fail to be mentioned that tensions grow between the United States and Iran and the possibility that the American power attacks the Middle Eastern country is not ruled out. This potentially warlike shock makes investors more cautious and away from more volatile assets.
To this must be added the appointment of the next president of the Federal Reserve (FED) United States. As NoticiasVE has reported, Kevin Warsh is a bitcoiner and it seems that he will align himself with President Donald Trump’s wishes to lower interest rates. In any case, in the past it has acted in favor of a restrictive monetary policy, which generates doubts in the market about what it will finally do.