One investor who correctly called the 2022 crypto bottom says markets are likely gearing up to follow in the footsteps of a bullish stock market.
Chris Burniske, a partner at the venture capital firm Placeholder, tells his 261,600 Twitter followers that crypto often rises when the Nasdaq 100 index (NDX) takes a breather.
The investor cites data from Glassnode founders Jan Happel and Yann Allemann who remark that Bitcoin (BTC) has surged several times since 2019 after the NDX cooled.
Say Burnishe,
“An interesting observation that crypto often spins after NDX crashes – rotation to higher risk.”
Happel and Allemann say Bitcoin outperformed the NDX in May 2019 after the index showed signs of bullish exhaustion.
The Glassnode co-founders add that it was the same case in 2020 when Bitcoin outperformed the NDX after the index crashed.
According to Allemann and Happel, Bitcoin is now poised to once again outperform the NDX as the index could be close to a local high.
“Where are we now?
NDX is at April 2022 levels (445 days to get here) and BTC decoupled… History says we are close to Bitcoin’s explosion and outperformance.
Cool down in stocks -> capital rotates to riskier games -> BTC to the races.
Burniske agrees with with the sentiment of Glassnode’s co-founders and says capital could eventually rotate into riskier altcoins and other blockchain-based assets.
“Suppose the risky waterfall is NDX to BTC to ETH to SOL to DOGE to NFTs (non-fungible tokens).”
At the time of writing, Bitcoin is trading at $26,931, up more than 2% in the past 24 hours.
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Image generated: Midway through the journey
