Bitcoin

Rekt

The “Magnificent Seven” stocks have seen a sharp decline, threatening to bring more downward pressure on Bitcoin price.
Magnificent Seven, a moniker for some of the top-performing tech stocks like Nvidia and Microsoft, lost over $650 billion in cumulative market capitalization during regular trading on Aug. 5.
Despite staging a slight recovery since, another potential decline in the top tech stocks could lead to lower Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) prices, according to Akshay Nassa, the founder of Chimp exchange. Nassa told Cointelegraph:
<blockquote data-ct-non-breakable="true">
 “The correlation between stock market performance and cryptocurrency values is well-documented; as major tech stocks falter, investor sentiment generally shifts away from alternative assets, including Bitcoin.”
</blockquote>
The correlation between Bitcoin and tech stocks gained even more importance, as the tech-heavy Nasdaq has entered a significant correction, which could spill over into the crypto space, according to Nassa.
Related: <a href="https://cointelegraph.com/news/top-50-cryptos-lose-2024-gains-510b-selloff">$510B crypto sell-off wipes 2024 gains for top 50 coins</a>
<h2 id="could-bitcoin-dip-below-50-000-as-tech-stocks-struggle">Could Bitcoin dip below $50,000 as tech stocks struggle?</h2>
While stocks are generally more resilient to market volatility, another decline in the Magnificent Seven could hurt Bitcoin price, according to Alvin Kan, the COO of Bitget Wallet.
Kan told Cointelegraph:
<blockquote data-ct-non-breakable="true">
 “If the Magnificent 7, including Amazon and Apple, are falling, investors would want some form of insulation from even more risky assets like Bitcoin. This means that the extreme capital flight in the broader financial market can also weigh in on Bitcoin price.”
</blockquote>
Pressure from tech stocks, along with other crypto-specific catalysts, could potentially threaten another dip below the $50,000 mark, explained Kan:
<blockquote data-ct-non-breakable="true">
 “The ongoing market slump, accounting for a 32.32% drop from the former All-Time High for Bitcoin, has re-ignited the speculations of a further drop to $40,000… However, the price of Bitcoin is not crashing in isolation.”
</blockquote>
Other factors influencing Bitcoin and crypto prices include the Bank of Japan’s latest interest rate cut, along with “<a href="https://cointelegraph.com/news/market-makers-sold-300m-ether-august-2024">aggressive” ETH selling from market makers</a> like <a href="https://cointelegraph.com/news/jump-trading-sells-29m-ether-bottom-near">Jump Trading</a>, Kan added.
Related: <a href="https://cointelegraph.com/news/marathon-digital-bitcoin-holdings-july-2024">World’s largest Bitcoin miner increased BTC holdings by $124M in July</a>
<h3 id="the-macro-bitcoin-bottom-is-in-according-to-analyst">The macro Bitcoin bottom is in, according to analyst</h3>
The local Bitcoin bottom may be in, according to historical chart patterns on the monthly chart, analyzed by pseudonymous crypto analyst Rekt Capital.
The analyst <a href="https://x.com/rektcapital/status/1820912925911007381/photo/1" rel="noopener noreferrer nofollow" target="_blank">wrote</a> in an Aug. 6 X post:
<blockquote data-ct-non-breakable="true">
 “We are here (orange circle)”
</blockquote>
<figure>
 <img alt="Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500 billion loss " src="https://s3.cointelegraph.com/uploads/2024-08/b1407656-1eb3-4119-93b1-74e6913beb40.jpeg" title="">
 <figcaption style="text-align: center;">
 BTC/USD, 1-month chart, macro bottom. Source:<a href="https://x.com/rektcapital/status/1820912925911007381/photo/1" rel="noopener noreferrer nofollow" target="_blank"> Rekt Capital</a>
 </figcaption>
</figure>
However, the extent of the current correction will mainly depend on the inflows from the US spot Bitcoin exchange-traded funds (ETFs).
The US Bitcoin ETFs have recorded three consecutive days of net outflows, with over $148 million worth of cumulative outflows on Aug. 6, according to Farside Investors <a href="https://farside.co.uk/?page_id=997" rel="noopener noreferrer nofollow" target="_blank">data</a>.
<figure>
 <img src="https://s3.cointelegraph.com/uploads/2024-08/21cd5f9b-ee9b-47d9-8a6c-56dff30cb275.png" alt="Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500 billion loss ">
 <figcaption style="text-align: center;">
 Bitcoin ETF Flow (US$m). Source: Farside Investors
 </figcaption>
</figure>
<a href="https://cointelegraph.com/explained/what-are-etf-fund-flows-and-why-do-they-matter">ETF inflows</a> can significantly contribute to a cryptocurrency’s price appreciation. For Bitcoin, ETFs had accounted for about <a href="https://cointelegraph.com/news/bitcoin-etfs-about-75-new-investment">75% of new investment</a> in the world’s largest cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-price-prediction-ethereum-altcoins-crypto-trader-roman-hall-of-flame-cointelegraph/">Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman</a>

Bitcoin could fall below $50K if Magnificent 7 stocks stage another $500 billion loss

Table of Contents

Cointelegraph

Other articles published on Aug 7, 2024

Brandt’s Analogy: How Bitcoin’s Fall Resembles 2016 Episode and What It Portends for BTC Valuation

Binance Labs Announces Second Cohort of Season 7 Incubation Program: Aarc, FluxLayer, and Ton Ton...

Revolutionizing Solutions: 8 Cryptocurrencies Tackling Real-World Challenges

Crypto Fraud Unveiled: How Singapore Investors Lost $1.1M To Phony Digital Currency Scheme

Ethereum's Mt. Gox? $2 Billion ETH From Chinese Ponzi Reawakens

Ethereum Price Recovery Likely as BOJ Softens Rate Hike Talk

Join our free newsletter for daily crypto updates!