The Nasdaq, as a leading global technology stock index and stock exchange, has recently influenced the price fluctuations of cryptocurrencies (such as Bitcoin BTC and Ethereum ETH) to some extent. However, this influence is not a direct causal relationship but is transmitted indirectly through market sentiment, investor behavior, and macroeconomic factors. In this case, how exactly does the Nasdaq influence cryptocurrencies?
We believe this can be summarized in the following points:
Linkage of market sentiment and risk appetite
The Nasdaq is primarily composed of technology stocks, and its fluctuations usually reflect investor confidence and preference for high-risk assets. Cryptocurrencies, as a class of highly volatile and high-risk assets, share psychological similarity with tech stocks. When the Nasdaq rises, investors are often more willing to chase high-return assets, driving funds into the cryptocurrency market; conversely, when the Nasdaq falls, risk-averse sentiment rises, and funds may exit from cryptocurrencies.
For example, on March 3, 2025, the Nasdaq triggered a 'double top' bearish pattern, and Bitcoin subsequently tested the 200-day moving average support and fell over 10%. This indicates that the downward pressure from the Nasdaq may trigger market panic, exacerbating cryptocurrency sell-offs.
In the short term, significant volatility in the Nasdaq may amplify price fluctuations in cryptocurrencies, especially during periods of low market sentiment (such as the current fear-greed index at 20).
Cross-market behavior of institutional investors
Many institutional investors participate in both the Nasdaq and cryptocurrency markets. Institutional investors (such as BlackRock and Citadel Securities) allocate funds simultaneously in both the US stock and cryptocurrency markets, adjusting dynamically based on market performance. For example, publicly traded companies holding BTC (such as MicroStrategy) are listed on the Nasdaq, and their stock prices are highly correlated with BTC prices. When Nasdaq tech stocks perform poorly, these companies' stock prices may drop, indirectly affecting market confidence in BTC. Moreover, institutions may adjust asset allocations under market pressure, shifting from cryptocurrencies to safer traditional assets.
For instance, Coinbase and other cryptocurrency-related stocks listed on the Nasdaq are directly affected by BTC and ETH prices. If the Nasdaq falls overall, these stocks may come under pressure, dragging down cryptocurrency market sentiment in return.
Additionally, the liquidity crisis triggered by a sharp drop in the Nasdaq (such as Nvidia and other tech stocks entering a bear market) can drain funds from the cryptocurrency market, exacerbating price declines. The flow of institutional funds may lead to short-term synchronization between cryptocurrency prices and the Nasdaq's movements, especially during market correction periods.
Resonance of macroeconomic background
The Nasdaq is affected by the Federal Reserve's interest rate policies, the US dollar exchange rate, and global economic events, which also impact cryptocurrencies. For instance, Federal Reserve rate hikes typically lead to declines in the Nasdaq while increasing the opportunity cost of holding non-yielding assets (such as BTC), prompting investors to sell cryptocurrencies.
For example, during the Federal Reserve's interest rate hike cycle in 2022, the correlation between the Nasdaq and BTC significantly increased, with both experiencing substantial pullbacks. The uncertainty of Trump's policies in March 2025 (tariffs) may also transmit to the cryptocurrency market through the Nasdaq.
Under macroeconomic pressure, the decline of the Nasdaq may exacerbate the downward trend of cryptocurrencies, while a loosening policy may drive a double rebound.
Signal transmission in technical analysis
Traders often regard the technical patterns of the Nasdaq (such as 'double tops' or 'breakouts') as market trend signals. Due to the statistically positive correlation between BTC and the Nasdaq (especially in the past two years), these signals may trigger follow-up reactions in the cryptocurrency market.
Research indicates that the long-term recovery of BTC is highly correlated with the trend of the Nasdaq. After the 'double top' pattern was triggered on March 3, the BTC quickly fell below key support, showing technical linkage effects.
Technical traders may adjust their cryptocurrency positions based on Nasdaq movements, amplifying price volatility.
Specific analysis in the current context (March 5, 2025)
The recent underperformance of the Nasdaq (such as the 'double top' pattern), combined with market uncertainty regarding Trump's economic policies, may generally pressure risk assets. BTC is currently priced at approximately $87,829, and ETH at around $2,193, both within a fluctuating range.
Short-term impact: If the Nasdaq continues to decline, BTC may test the 200-day moving average support at $82,587, while ETH may drop below $2,000. Market panic (fear-greed index at 20) may exacerbate this trend.
Potential turnaround: If the White House cryptocurrency summit on March 8 releases positive signals (such as support for Nasdaq trading in cryptocurrency assets), it may reverse sentiment and boost a rebound in both the Nasdaq and cryptocurrencies.
Counterexamples
The price movements of cryptocurrencies do not completely follow the Nasdaq; their main precondition is:
1. The intrinsic market technical aspects of cryptocurrencies have garnered attention, at which point cryptocurrencies will trend independently of the Nasdaq, as people will focus more on the wealth generation effect of cryptocurrency assets, such as the Bitcoin ecosystem at the beginning of 2024 and the MEME craze.
2. The influence of news has weakened. We can observe that the strong correlation between the Nasdaq and cryptocurrencies often occurs when the influence of news increases, especially in economic and policy aspects, which highlights resonance behavior. However, once this form is absent, the correlation will weaken.
3. There are also some regions affected by geopolitical influences where turmoil leads to opposite trends between cryptocurrencies and the stock market, such as a decline in the Nasdaq while cryptocurrencies rise. This is generally caused by the collapse of fiat currency credibility in certain regions, leading to a sharp drop in the corresponding stock market. To protect their assets, the public can only convert them into freely usable cryptocurrencies.
Summary
The Nasdaq indirectly influences cryptocurrency price fluctuations through market sentiment, institutional behavior, macroeconomic factors, and trading signals. Its impact is not absolute but results from the interplay with other factors (such as policy, technological upgrades, and supply-demand dynamics). Currently, the downward pressure on the Nasdaq may temporarily drag down BTC and ETH, but the long-term trend depends on the cryptocurrency market's narrative and external catalysts (such as regulation or adoption rates). Investors are advised to pay attention to the Nasdaq's key support levels (such as 15,000 points) and the technical levels of cryptocurrencies to assess the strength of the linkage effect.
