Bitcoin selling pressure continues and more so as the world’s largest cryptocurrency slips by another 3% and is now trading under $27,000. As of press time, the BTC price is trading 3.13% down at a price of $26,795 and a market cap of $519 billion.
Since the beginning of 2023, Bitcoin (BTC) has shared a weakened correlation with technology stocks. For the last month of May, Bitcoin gave the first negative monthly closing for the year 2023. On the other hand, with hype in artificial intelligence, the Nasdaq 100 added more than 8% last month.
While Bitcoin investors enjoyed the weakened correlation with tech stocks earlier since BTC was rallying, now, the odds have turned against them. The 30-day coefficient for Bitcoin and Nasdaq 100 is around 0.2 versus 0.8 in May 2022. The reading of 1 means that both are moving in lockstep. Similarly, the reading of -1 means that they are moving in the opposite direction.
Courtesy: Bloomberg
Bitcoin and the AI Buzz
The rally in Nasdaq 100 was aided majorly bu the AI buzz with players like the Nvidia Corporation (NASDAQ: NVDA) rallying by a massive 30% last month. On the other hand, the BTC price failed to give a decisive breakout above $30,000 and instead ended the month of May 8% down with its overall 2023 gains now at 64%, still sizeable.
On the other hand, the Nasdaq 100 index is up by 30% since the beginning of 2023 and some analysts have started to question how sustainable the gains are considering only a few mega-cap companies have supported this rally. Stephane Ouellette, chief executive of FRNT Financial Inc. told Bloomberg:
“Correlations have and will continue to be dynamic in the space as adoption grows and changing investment theses dominate trading windows”.
Some analysts also believe that Bitcoin’s decoupling from Nasdaq would be beneficial to the asset over the long term. Also, the strong AI narrative in the market has served as a major catalyst for tech stocks to rally and outperform top digital assets like Bitcoin and Ether.