Bitcoin is about to revisit past $60,000 per coin, a recent BTC vs. Nvidia comparison suggests.
The two charts on top of each other show an ongoing link between a cryptocurrency company and a gaming GPU. But will the observed correlation continue?
Nvidia shares shock as the bear market spikes into ATHs
Nvidia (NVDA) surprised the bears in the stock market by revisiting the highs that occurred in 2021. The rise in NVDA share prices can be largely attributed to its leading role in powering artificial intelligence models such as chat.
The recent rise in artificial intelligence has saved technology stocks from the sting of the recession. Nvidia is a component of the Nasdaq 100 Index, which recently hit a higher high.
But what does this have to do with Bitcoin with all this talk of tech stocks and AI? To start, it says a lot about the return of risk appetite. Tech stocks tend to outperform as a sector during a market rally.
NVDA often leads Bitcoin | BTCUSD on TradingView.com
However, there is more than just a rising tide raising the all-boats theory for consideration. The above chart shows the correlation between NVDA and Bitcoin, and suggests that we could see a big move in BTC as well as in the chip maker.
Bitcoin vs NVDA Correlation Examination
As a caveat, there is no guarantee that a correlation will always remain between two assets. Historically, there is a strong correlation between BTCUSD and NVDA.
The correlation goes back a decade | BTCUSD on TradingView.com
The correlation appears to be broken when Bitcoin hits a short-term peak, but is finally back on track with less volatile growth compared to Nvidia stocks. A long-term look shows that this relationship goes back several years.
If the correlation holds, the bitcoin price could rise to $60,000 per bitcoin. And that’s only if NVDA doesn’t keep up its momentum. If that happens, and makes a new record high, the possibility is high that BTCUSD will do as well.
Although it is too early to tell, the hype surrounding AI could be a catalyst for a dot-com-like boom in tech stocks, which will eventually also spill over into cryptocurrencies, further widening the financial markets. For now, this is just a guess, but the history of the association suggests an outcome is possible.
# Bitcoin against $NDVA It suggests that we will see BTC in excess of $60k soon pic.twitter.com/xiUqZVBdCF
– Tony “The Bull” (tonythebullBTC) May 22, 2023