The price of Bitcoin (BTC) has been trading below its 200-day moving average since early August 2024. More notably, the 200-day moving average (200 DMA) has now flattened, signaling a potential pause in the long-term upward trend. While this technical development has caught the attention of traders and analysts, a deeper look reveals that there’s a far more significant indicator shaping Bitcoin’s future: its correlation with the Nasdaq.
👉 Discover how market correlations are reshaping crypto investing strategies.
Understanding the 200-Day Moving Average
The 200-day moving average is one of the most widely followed technical indicators in both traditional and digital asset markets. When an asset trades below this line, it's often interpreted as bearish sentiment. In Bitcoin’s case, dropping below the 200 DMA in August 2024 was a notable shift after months of bullish momentum.
Two key observations from the current BTC price chart:
- BTC broke below its 200 DMA in early August and has struggled to reclaim it, indicating persistent selling pressure or lack of strong buying interest.
- The 200 DMA has flattened, suggesting the long-term trend is losing upward momentum. This technical nuance is increasingly factored into algorithmic trading systems, potentially giving bears a structural edge in the near term.
However, it’s crucial to remember: moving averages are lagging indicators. They reflect past price behavior rather than predict future movements. For forward-thinking investors—especially in fast-moving markets like crypto—relying solely on lagging data can lead to misjudged entries or exits.
While seasonal trends also play a role (and we’re currently in a historically weaker period for risk assets), the real story isn’t just about where Bitcoin has been—it’s about where it’s likely to go next, and what forces are driving it.
The Bigger Picture: Bitcoin and the Nasdaq Correlation
Bitcoin is no longer an isolated digital experiment. It’s now deeply embedded in the global financial system—a transformation accelerated by key developments:
- The launch of Bitcoin futures in 2017
- The approval and rollout of spot Bitcoin ETFs in 2024
These milestones have tied Bitcoin’s price action more closely to traditional markets than ever before. As a result, intermarket dynamics—the relationships between different asset classes—are now essential to understanding BTC’s trajectory.
And among all market linkages, the correlation between Bitcoin and the Nasdaq stands out as one of the most powerful.
Why the Nasdaq Matters for Bitcoin
The Nasdaq Composite Index, heavily weighted with tech and growth stocks, serves as a barometer for investor sentiment toward innovation, risk appetite, and liquidity. When investors feel confident (“risk-on” mode), both tech stocks and Bitcoin tend to rise together.
Here’s what the BTC-Nasdaq relationship reveals:
- BTC and Nasdaq often move in tandem during bull runs
When macroeconomic conditions support risk-taking—low interest rates, strong liquidity, positive earnings—both Bitcoin and high-growth equities rally simultaneously. - Bitcoin frequently peaks before the Nasdaq
Historically, Bitcoin has shown a tendency to top out 2–4 months before the broader tech index. In 2024, BTC reached its high in March/April, while the Nasdaq continued climbing—though it now shows signs of stalling. - Bitcoin may lead the next recovery
Just as BTC topped early, it could also bottom out ahead of the Nasdaq and act as a leading indicator for the next broad market upswing.
This interplay makes the Nasdaq correlation not just interesting—it’s 10x more insightful than watching Bitcoin’s 200 DMA alone.
👉 See how leading investors use cross-market analysis to time their entries.
Market Implications for 2025: Bullish Long-Term, Cautious Short-Term
Despite short-term weakness, the long-term outlook for Bitcoin remains strong. Consider this:
- BTC surged from around $17,000 to nearly $72,000 in just 16 months.
- Such explosive growth naturally demands a period of consolidation.
- Extended sideways movements aren’t signs of failure—they’re often prerequisites for stronger rallies.
In fact, the longer and healthier the consolidation phase, the more sustainable the next leg up tends to be.
So while hopes of Bitcoin hitting $100,000 in 2024 have faded (and realistically won’t materialize this year), a breakout toward that level in 2025 is entirely within reach—especially if macro conditions improve.
Our current stance reflects this duality:
- ✅ Long-term bullish: Structural adoption, ETF inflows, and halving cycle fundamentals support higher prices over the next 12–18 months.
- ⚠️ Short-term cautious: With BTC below key technical levels and the Nasdaq showing exhaustion, we advocate for selectivity.
- 🔍 Highly selective buying: Not every dip is worth buying. Only assets with strong fundamentals, on-chain activity, and institutional interest qualify under strict “buy the dip” criteria.
Frequently Asked Questions (FAQ)
Q: What does it mean when Bitcoin trades below its 200-day moving average?
A: It typically signals weakening momentum and a shift toward bearish sentiment. However, since moving averages are lagging, they confirm trends after they’ve started—not before.
Q: Is Bitcoin still in a bull market if it's below the 200 DMA?
A: Yes. Bull markets don’t move in straight lines. Corrections and consolidations are normal. The broader secular bull trend can persist even during extended pullbacks.
Q: Why is the Nasdaq correlated with Bitcoin?
A: Both are viewed as growth/risk-on assets. They respond similarly to changes in liquidity, interest rates, and investor sentiment—especially since BTC ETFs brought institutional capital into crypto.
Q: Did Bitcoin peak before the Nasdaq in previous cycles?
A: Yes. In both the 2017 and 2021 cycles, Bitcoin topped out several months before major equity indices followed suit. This pattern suggests BTC may act as a leading indicator.
Q: Can Bitcoin reach $100K in 2025?
A: Absolutely. While unlikely in 2024 due to macro headwinds, improved sentiment, ETF adoption, and post-halving dynamics make a $100K move feasible in 2025.
Q: Should I sell my Bitcoin because it's below the 200 DMA?
A: Not necessarily. Technical indicators should be viewed alongside macro trends and intermarket analysis. Selling based on one metric alone can lead to missed opportunities.
👉 Learn how top traders balance technicals with macro insights for smarter decisions.
Final Thoughts: Look Beyond the Hype
Bitcoin’s journey is no longer driven by memes or isolated crypto narratives. It’s influenced by global liquidity flows, institutional participation, and its growing alignment with tech equities.
While charts like the 200 DMA offer context, they’re secondary to understanding how Bitcoin behaves relative to major financial markets—especially the Nasdaq.
For serious investors, the takeaway is clear:
Don’t just watch Bitcoin. Watch what moves with it.
As we move into 2025, staying informed, patient during consolidation, and ready to act when correlations signal a shift will be the keys to success.
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