Blog

A quant has defined why the latest retest of a important assist degree by Nasdaq might assist Bitcoin reverse its personal development.

Nasdaq-100 Has Recently Retested A Critical Support Trendline

As identified by an analyst in a CryptoQuant post, Nasdaq-100 is presently above a assist line that has traditionally been vital.

Nasdaq-100 (NDX) is a inventory market index that features 102 fairness securities issued by 101 of the biggest non-financial firms (primarily based on their market caps) listed on the Nasdaq inventory trade.

Here is a chart that reveals how this trendline has acted as a bounce within the index’s worth over the previous decade:

The worth of the asset appears to have touched this line not too long ago | Source: CryptoQuant

As you’ll be able to see within the above graph, the value of NDX has been supported 5 occasions by this trendline because the 12 months 2010. In every of those cases, the road has put a examine on the decline within the index, and has consequently reversed it again up.

Recently, the Nasdaq-100 index has as soon as once more made a contact of this trendline, and has up to now managed to remain above it.

The quant notes that this retest might have been the tip of the newest downwards development, and may need additionally been the purpose of return of a bullish development.

However, if the trendline is misplaced as an alternative, it might present the acute energy of the downtrend, and would recommend that there’s extra drawdown forward for the market.

At the identical time, Bitcoin has additionally been testing a assist line, because the analyst has highlighted within the chart:

Looks like BTC can also be simply above a assist trendline proper now | Source: CryptoQuant

In the previous 12 months or so, Bitcoin has proven to be highly correlated with the inventory market. The cause behind this correlation has been the rise of institutional buyers within the crypto who deal with it like a danger asset.

The quant believes that if the present assist retest within the inventory market proves to achieve success, then BTC may be anticipated to see a reversal of its personal because of its correlation with the shares.

Bitcoin Price

At the time of writing, Bitcoin’s price floats round $17.2k, up 1% within the final week. Over the previous month, the crypto has misplaced 7% in worth.

Below is a chart that reveals the development within the worth of the coin during the last 5 days.

The worth of the crypto appears to have noticed a pointy surge to $17.2k over the previous day | Source: BTCUSD on TradingView

Featured picture from Maxim Hopman on Unsplash.com, charts from TradingView.com, CryptoQuant.com