Quant explains how this Nasdaq support retest could also help reverse Bitcoin

A quant has explained why the recent retest of a critical support level by the Nasdaq could help Bitcoin reverse its own trend.

The Nasdaq-100 recently retested a critical support trendline

As pointed out by an analyst in a CryptoQuant post, the Nasdaq-100 is currently above a support line that has historically been important.

The Nasdaq-100 (NDX) is a stock market index that includes 102 equity securities issued by 101 of the largest non-financial companies (based on their market capitalization) listed on the Nasdaq stock exchange.

Here’s a chart showing how this trendline has acted as a bounce in the index’s price over the past decade:

The value of the asset seems to have touched this line recently | Source: CryptoQuant

As you can see in the graph above, the price of NDX has been supported five times by this trend line since 2010. In each of these cases, the line has put a check on the decline in the index, and has consequently reversed it. back up.

Recently, the Nasdaq-100 index has once again made a touch of this trend line, and has so far managed to stay above it.

Quant notes that this retest may have been the end of the most recent downtrend, and may also have been the return point of a bullish trend.

However, if the trendline is lost instead, it will show the extreme strength of the downtrend, and suggest that there is more downside ahead for the market.

At the same time, Bitcoin has also tested a support line, which the analyst has highlighted in the chart:

Looks like BTC is also just above a support trendline right now | Source: CryptoQuant

Over the past year or so, Bitcoin has proven to be highly correlated with the stock market. The reason behind this correlation has been the emergence of institutional investors in the crypto who treat it as a risk asset.

Quant believes that if the current stock market support retest proves successful, BTC can also be expected to see a reversal of its own due to its correlation with stocks.

Bitcoin price

At the time of writing, Bitcoin’s price is hovering around $17.2k, up 1% in the last week. Over the past month, the crypto has lost 7% in value.

Below is a chart showing the trend in the price of the coin over the last five days.

The value of the crypto seems to have observed a sharp surge to $17.2k over the past day | Source: BTCUSD on TradingView

Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, CryptoQuant.com