6 ALARMING Signs that a Bitcoin Bubble (and Nasdaq Bubble) is about to Burst in the Coming Weeks
We’re at a critical point for Bitcoin and the stock market!
Perhaps yesterday was a warning that the Bitcoin bubble is about to burst and take the stock market bubble with it. We are at a critical point, the next day or two will be vital.
Yesterday was a warning, a warning of how quick profits can be wiped out in today’s market. We are either witnessing the start of a devastating Bitcoin and stock market crash or another insane rally taking us to new highs.
Bitcoin and the Nasdaq tech stocks took a deep dive with Bitcoin losing over $10,000 early in the day and the NASDAQ 100 index finishing the day down over 350 points. It was one of the worst days for Bitcoin and technology stocks in recent memory and a warning that we may be in a market bubble.
Bitcoin and the NASDAQ 100 index have been moving rather in sync as of late, both hitting consistent all-time highs recently. Many of the stocks in the NASDAQ benefit from a Bitcoin rally such as financial technology companies like PayPal and GPU manufacturers like Nvidia. Tesla also announced it has directly invested in Bitcoin and have made substantial profits already.
Here’s the kicker:
When Tesla CEO Elon Musk himself admitted via Twitter that Bitcoin may be highly priced and Janet Yellen called the cryptocurrency “inefficient” and “highly speculative”, the coin took a sharp correction. Although Bitcoin has had more institutional acceptance this year, it remains to be seen if a currency that can lose 20% of its value in one day is viable. It is still early days before Bitcoin will gain widespread acceptance.
It gets even worse:
Combined with the concern of interest rates rising with the 10-year treasury note yield hitting 1.36% and the 30-year treasury bond yield advancing to 2.17%, tech stocks had a major pullback.
The question is though, is this another buy-the-dip opportunity to reach more all-time highs or is it time to run for the hills as the markets are about to crash?
Some analysts and famous investors have warned us about a possible Bitcoin bubble and Nasdaq bubble. When COVID first hit, investors were unsure how long we could be stuck at home, so they piled into the stay-at-home tech stocks forming a tech stock bubble that could burst now the economy is reopening.
During our research for a previous story, we discovered that many insiders and professional fund managers have been selling their shares in US tech stocks. Our research also found that many of the buyers of these tech stocks have been new retail investors with little experience with investing.
Our research on Bitcoin found the market is cornered with a majority of Bitcoin being held by very few players, the so-called Bitcoin whales. If a whale decides to sell some holdings, that will make Bitcoin crash.
Another reason money has flocked to Bitcoin and stocks has been the fact that interest rates are rock bottom and investing in bonds currently gives little return. However, if bonds become more attractive with yields rising, that could be the absolute worse outcome for the stock market.
Fears of inflation are also high due to the huge amount of stimulus from the government and money printing by the Federal Reserve. If inflation takes hold, the Federal Reserve may try to raise interest rates to curb spending.
Here’s the bottom line:
This all points to the fact that valuations are currently high and investing into Bitcoin and Nasdaq stocks right now is extremely risky.
The NASDAQ 100 finished the day at a key support level where if it falls any further that may trigger panic selling and a deep stock market correction or crash.
Bitcoin recovered some of its losses later in the day and finished the day down around $3,000.
The next few days will be critical, if both Bitcoin and Nasdaq fall any further, panic will set in and could cause a deep market crash. However, if the NASDAQ 100 holds its support with a strong bounce and Bitcoin continues to recover from today’s losses, we could see both hitting fresh all-time highs.
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By Richard Ahern – LifeLine Media
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1) Elon Musk’s Bitcoin Tweet Hurts Tesla’s Own Bet in Currency https://www.bloomberg.com/news/articles/2021-02-22/elon-musk-s-bitcoin-tweet-hurts-tesla-s-own-bet-in-currency
2) Janet Yellen Warns Bitcoin Is ‘Extremely Inefficient’ and ‘Highly Speculative’ as BTC Price Plunges https://news.bitcoin.com/janet-yellen-bitcoin-extremely-inefficient-highly-speculative-btc-price/
3) Treasury yields rise in choppy trading https://www.cnbc.com/2021/02/22/us-bonds-treasury-yields-climb-amid-economic-recovery-hopes.html
4) Jeremy Grantham Thinks the Bubble Will Burst… https://www.ai-cio.com/news/jeremy-grantham-thinks-bubble-will-burst-stock-picks/
5) The DATA is Showing a Stock Market CRASH is Coming! | REAL and UNCENSORED NEWS https://www.youtube.com/watch?v=bgWeI27Hp14&list=PLDIReHzmnV8xT3qQJqvCPW5esagQxLaZT&index=2
6) Distressing DATA Predicts a Devastating BITCOIN CRASH in 2021 Could be Coming! https://www.youtube.com/watch?v=-kbRDHdc0SU&list=PLDIReHzmnV8xT3qQJqvCPW5esagQxLaZT&index=7
7) What Is the Relationship Between Inflation and Interest Rates? https://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
[…] However, he has now turned to the crypto market, which is unregulated, so he can have more fun and not get in trouble. In recent months, his tweeting seems to be the driving force of the entire cryptocurrency market. When he said Tesla was allowing cars to be purchased with Bitcoin, the price of Bitcoin skyrocketed. […]