A widely followed crypto analyst predicts that Bitcoin (BTC) is headed for a major correction based on a blinking bear signal.
In a new video update, Nicholas Merten, the host of DataDash, tells are 511,000 YouTube subscribers that Bitcoin’s performance against the NASDAQ is weakening, indicating a downward trend for the crypto king.
Merten notes that big tech is making huge short-term profits, fueled by the potential of artificial intelligence (AI) technology, outpacing Bitcoin’s price action.
“What’s really concerning lately is looking at the NASDAQ, the broader measurement of technology stocks… which Bitcoin is currently vastly outpacing. They continue to score higher here on promises related to artificial intelligence. That’s the big trend right now…
The NASDAQ is at its highest since April 2022…
We believe we are still in a bear market long term. I have to be honest though, this price action is starting to challenge that. We’re starting to see the momentum pick up quite a bit here over the past few weeks as we’ve seen the NASDAQ pop from around 12,300 to 13,240. Again, pushing it to the highest point since April 2022.
Can Bitcoin say the same here? Well, not exactly…
We’re back near ranges we haven’t seen since June 2022. And essentially, we’re steadfastly approaching where we were here in August.
Merten says that by comparing Bitcoin to the NASDAQ using the BTC/NDX ratio, the crypto king appears to be setting the stage for a major downward move as BTC gives up gains pushed against NASDAQ during Bitcoin’s recent rally.
“The main point here is this: we need look no further than the relationship between Bitcoin and NASDAQ…
From November 2022 here to April 2023, during this six-month period, Bitcoin significantly outperformed the NASDAQ. It went from about a ratio of 1.4 to 2.5…
Overall, Bitcoin outperformed the NASDAQ by 75% from those all-time lows. That was a really great recovery and one of the strongest what we think are relief rallies for Bitcoin that we’ve ever seen, probably only comparable, at least in terms of market cap size, to the rally we saw during the bear market lows from 2018 into 2019.
But we have to wonder if that will continue. Because right now the ratio itself is down more than 20%. And it is approaching a critical level here.”
Bitcoin is trading at $26,904 at the time of writing, up 5.4% over the past 24 hours.
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