Bitcoin Slides 10% as Nasdaq’s Bearish Reversal Clouds Long-Term Outlook

Bitcoin tumbled 10% on Monday as a bearish reversal pattern in the Nasdaq Composite Index cast a shadow over the cryptocurrency’s long-term outlook.

The leading digital asset fell to $82,587, a price level below its 200-day simple moving average (SMA).

The selloff was after a report by Ecoinometrics revealed a strong positive correlation between Bitcoin and the Nasdaq and warned that the cryptocurrency’s long-term recovery hinges on the tech-heavy index’s ability to trend upward.

This was exacerbated by a double top pattern ( a technical analysis position that signals extended declines) formed on Nasdaq, largely interpreted as further bearish sentiment.

Also, the Nasdaq closed 2.2% lower to confirm the report and the broad bearish sentiment that put Bitcoin’s 200-day SMA support in jeopardy.

The drop comes as both Bitcoin and the Nasdaq have struggled to regain bullish momentum after peaking in December.

According to technical analysis theory, a confirmed double top pattern in the Nasdaq could result in a decline of at least 70% of the distance between the peaks and the trough.

This suggests further downside risks for Bitcoin if the correlation persists.

The swift reversal caught crypto traders off guard, particularly after Sunday’s price rally saw Bitcoin surge to $95,000 following optimism around President Donald Trump’s announcement of a U.S. crypto strategic reserve.

The proposal initially sparked a buying frenzy with market participants interpreting it as an endorsement of digital assets.

However, the optimism was short-lived as Trump’s announcement of fresh tariffs on China, Canada, and Mexico triggered a broader risk-off sentiment that lead to sharp selloffs in both equity and crypto markets.

Kevin Guo, director of HashKey Research, attributed the volatility to macroeconomic uncertainties overshadowing the potential benefits of Trump’s crypto reserve plan.

“Trump’s latest tariff announcements on Canada, Mexico, and China caused a massive selloff of crypto assets, completely reversing the previous day’s crypto strategic reserve gains,” Guo said in a statement. “Despite a slew of pro-crypto deregulation initiatives, investors view cryptocurrencies as risk assets strongly bound by the performance of the US equity market.”