Bitcoin price is currently consolidating above $30,000 per coin after a $5,000 rally from local 2023 lows. However, a new chart putting BTC up against the Nasdaq stock index suggests that the top crypto asset is merely gearing up for an explosive push higher.
For weeks now, tech stocks have been surging, while cryptocurrencies have lagged behind. The change in the ratio between BTC and the NDX could suggest that crypto is about to catch up to stocks in a major way.
Nvidia Sets New ATH, Nasdaq Soars, But What About Bitcoin?
Bitcoin has recently begun to pick up steam, but compared to tech stocks, remain far behind in terms of overall recovery.
For example, Nvidia shares have set new all-time highs. Meanwhile, the Nasdaq (NDX) stock index has returned to Q1 2022 prices, just prior to the bear market.
However, the laggard behavior in BTC and other cryptocurrencies looks ready to reverse, according to the ratio between Bitcoin and the NDX.
Furthermore, the weekly correlation coefficient is strengthening after falling in recent weeks. This suggests that the relationship between the two is becoming tighter than before.
Bitcoin could soon outperform tech stocks | BTCUSD/NDX on TradingView.com
Why Crypto Could Be Ready To Catch Up To Stocks
Typically, when performing technical analysis an investor or trader will open a price chart for a standard trading pair, such as BTCUSD. This trading pair quotes the price of Bitcoin in US dollars.
However, advanced analysis methods include studying the ratio between two otherwise unrelated assets. In one example, investors look at the gold to stocks ratio to understand when to switch from hard to soft assets and vice versa.
In the chart above, BTCUSD can be seen close to breaking out from downtrend resistance against the NDX. This unorthodox ratio chart could be foretelling a phase of significant over-performance in Bitcoin versus tech stocks, after weeks of the opposite.
If this were to occur, and the crypto market finally caught up, in theory, these digital assets could also return to Q1 2022 prices. For Bitcoin, this would be just below $50,000 per coin.
#Bitcoin versus #NDX ratio breakout pending in favor of BTC outperformance pic.twitter.com/G7bJ3R2wBu
— Tony "The Bull" (@tonythebullBTC) June 27, 2023
