Bitcoin is about to revisit above $60,000 per coin, a recent comparison between BTC and Nvidia suggests.
The two charts layered over one another show an ongoing correlation between the cryptocurrency and gaming GPU company. But will the notable correlation continue?
Nvidia Shares Shock With Bear Market Rally To ATHs
Nvidia (NVDA) has surprised stock market bears by revisiting all-time highs set back in 2021. The rally in NVDA share prices can be largely attributed to its leadership role in powering AI models like ChatGPT.
The rise in artificial intelligence recently saved tech stocks from the sting of a recession. Nvidia is a component in the Nasdaq 100 Index, which recently set a higher high.
But what then does this have to do with Bitcoin with all this talk about tech stocks and AI? To start, it says a lot about risk appetite returning. Tech stocks tend to outperform as a sector during a market recovery.
However, there is more than just the rising tide lifts all boats theory to consider. The chart above shows the correlation between NVDA and Bitcoin, and it suggests we could see a big move in BTC much like we have in the chip maker.
Bitcoin Versus NVDA Correlation Examined
As a caveat, there is no guarantee that a correlation will always remain between two assets. Historically, however, there is a strong correlation between BTCUSD and NVDA.
The correlation appears to break when Bitcoin makes a short term peak, but eventually gets back on track with the less volatile growth than in Nvidia shares. A longer term view shows this relationship going back for several years.
If the correlation is to continue, Bitcoin could climb as high as $60,000 per BTC. And that’s only if NVDA doesn’t keep up its momentum. If it does, and makes a significant new record high, the probability is high that BTCUSD does as well.
Although it’s early to say, the buzz surrounding AI could be a catalyst for a dot com-like boom in tech stocks, which ultimately would also spill into crypto, adding to the breadth in financial markets. Currently, this is merely speculation, but the history of correlation suggests the outcome is a possible one.
#Bitcoin vs $NDVA suggests we'll see BTC at over $60K soon enough pic.twitter.com/xiUqZVBdCF
— Tony "The Bull" (@tonythebullBTC) May 22, 2023