Tech Selloff Drags Bitcoin Lower: Nasdaq Correlation Turns Positive on AI Fears
Picture this: older investors stack physical gold while watching crypto portfolios evaporate. That's the vibe dominating markets today. Tech giants are reeling from AI disruption worries, sparking a risk-off wave that's pulling Bitcoin and the broader crypto space into the red. The once-negative tie between BTC and the Nasdaq has flipped positive, amplifying the pain across growth assets.
The trigger? Mounting skepticism around AI's real-world payoff. Software stocks and chipmakers have led the charge downward, with investors questioning sky-high valuations amid fears of job automation and slowing returns. Nasdaq futures tanked, erasing billions in market value as heavyweights like those in the Magnificent Seven faced profit-taking. Enter the correlation shift. Just weeks ago, Bitcoin's link to the Nasdaq sat at minus 0.68, offering some diversification. Now? It's surged to plus 0.72, per recent market data. This means when tech sneezes, BTC catches a full-blown cold. Crypto isn't acting as a hedge anymore—it's riding the same volatile rollercoaster as high-beta equities. Gold isn't immune either, dipping alongside the selloff, underscoring broad risk aversion. Whispers of an AI bubble bursting echo through trading floors, with software ETFs like IGV plunging as disruption fears rotate through sectors.
Bitcoin slid to around $68,000, shedding key support levels and dragging total crypto market cap lower by over 1%. Altcoins and memecoins fared worse, with PEPE and DOGE amplifying the downside. Crypto-exposed stocks like Coinbase tumbled in sympathy. The Nasdaq's woes wiped trillions from tech, spilling into equities broadly—S&P 500 and Russell 2000 followed suit. Even precious metals retreated, hitting leveraged positions hard. This synchronized dump signals deleveraging, with ETF outflows adding fuel to the fire.
This tech-crypto tango could persist if AI jitters deepen, but history shows these correlations unwind during bottoms. Savvy traders eye $65,000 BTC support for a potential rebound, while gold bugs gloat—for now. Stay nimble; the next big rotation might flip the script.
Sources:
- @alifarhat79
- CoinDesk