An investor who correctly called the 2022 crypto bottom says the markets are likely gearing up to follow in the footsteps of a bullish stock market.
Chris Burniske, a partner at the venture capital firm Placeholder, tells his 261,600 Twitter followers that crypto often rallies when the Nasdaq 100 index (NDX) takes a breather.
The investor cites data from Glassnode founders Jan Happel and Yann Allemann who note that since 2019, Bitcoin (BTC) has rallied big several times after the NDX cooled off.
Says Burniske,
“An interesting observation that crypto often runs after NDX stalls – rotation into higher risk.”
Happel and Allemann say that in May 2019, Bitcoin outperformed the NDX after the index flashed signs of bullish exhaustion.
The Glassnode co-founders add that it was the same case in 2020 when Bitcoin outran the NDX after the index stalled.
According to Allemann and Happel, Bitcoin is now on the verge of once again outperforming the NDX as the index may be close to marking a local top.
“Where do we stand now?
NDX is at April 2022 levels (445 days to get here) and BTC decoupled… History says we’re close to Bitcoin exploding and outperforming.
Cool off in equities –> capital rotates into riskier plays –> BTC off to the races.”
Burniske agrees with the sentiment of the Glassnode co-founders and says that capital could eventually rotate into risker altcoins and other blockchain-based assets.
“Suppose the high-risk waterfall is NDX to BTC to ETH to SOL to DOGE to NFTs (non-fungible tokens).”
At time of writing, Bitcoin is trading for $26,931, up over 2% in the last 24 hours.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxGenerated Image: Midjourney