Moment of truth for Bitcoin and tech

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Last Updated on 22 April 2024 by CryptoTips.eu

Geopolitics, interest rates and inflation all seem bent on stopping the advance of stock and crypto markets this month. With only 8 days left until the month of May, the old stock market adage ‘sell in May and stay away’ is gaining ground.

With a loss of around 10% since the March peak for Bitcoin and a loss of 5% for the Nasdaq in the past week, we are now faces with a moment of truth: will there be a new Bitcoin rally after the halving or will crypto follow tech lower?

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Persian gulf

In mid-March, it seemed as if the rally of both Bitcoin and the ‘magnificent seven’ stocks in the United States was never going to end.

In the past week things suddenly went the other way: Nvidia fell 10%, Tesla has been trading lower all year, Apple just can’t get out of the starting blocks and Bitcoin is also having a hard time repeating the peak of mid-March, it seems like investors are going full ‘risk-off’.

Reasons for all this pessimism are threefold: first, it is possible that Israel and Iran will start a second major war on the global stage. Such a conflict, combined with the ongoing war between Ukraine and Russia, would be very bad for the global economy as much oil trade has to pass through the Persian Gulf, and an Iranian war would likely close that.

Secondly, we’re still having to deal with high interest rates. At the beginning of this year, the consensus among investors was that there would be 7 interest rate cuts in 2024, by both the ECB and the Federal Reserve. That number has been completely scrapped, mainly due to growing economic activity in the United States.

Third, there is an inflation number which refuses to go below 3%. Companies have noticed that consumers continue to buy their products, even when they increase prices by about 3% every year. You will also pay more for tourism this year. Not because it really costs more, but because hotels and airlines simply know that you are willing to pay more.

Netflix

All this means that we appear less willing to take risks, and with Bitcoin at around $65,000, fewer new investors seem willing to join the crypto FOMO.

A possible follow-up will depend on the results of many tech companies reporting this week. Netflix’s results were out last week and did not do very well. We’ll be looking forward to Apple, Microsoft, Meta, Amazon and Alphabet this week. And of course we also want to see what Bitcoin does in the first week since the halving. A moment of truth beckons.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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