Bitcoin, the largest digital asset, experienced a significant downturn on Monday, marking one of its sharpest declines since the crypto-market began its recovery early last year. Investors anxiously eyed the $60,000 mark as a critical support level, hoping to stave off further losses.
Simultaneously, Nvidia, a symbol of the artificial intelligence revolution, saw its shares tumble nearly 7%, amounting to a staggering $430 billion loss over the past three trading sessions. This decline represents the largest three-day loss in value ever recorded by a company.
Despite impressive long-term gains, both Bitcoin and Nvidia’s recent volatility raises concerns about the sustainability of momentum-driven trades amidst looming prospects of sustained higher interest rates.
“People are realizing now that momentum works both ways,” remarked Chris Weston, head of research at Pepperstone Group. He noted that Bitcoin relies on positive sentiment to maintain its upward trajectory, while Nvidia faces challenges as a heavily saturated long position in the market.
Bitcoin showed signs of stabilization on Tuesday, reclaiming some ground with a 3% increase to surpass $61,000. In Asia, stocks and futures on the Nasdaq 100 also edged higher, suggesting resilient investor sentiment supported by gains across global stocks, gold, and cryptocurrencies over the past year.
Carol Schleif, deputy chief investment officer at BMO Family Office LLC, highlighted on Bloomberg Radio that while Nvidia struggled, an equal-weighted version of the S&P 500 rose on Monday. This gauge, which mitigates size biases and reduces the influence of mega-cap tech stocks, underscores the need for a diversified market for sustained growth.
“We believe that fundamental strength can extend across more industries than just technology,” Schleif emphasized, pointing to the importance of broadening market participation for sustainable economic resilience.
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