The first big one was Netflix, who reported their earnings yesterday morning.
Following this earnings report, Netflix shares closed at prices the stock hasn’t seen since January 2018, seeing a 35% drop overnight. This takes Netflix’s stock price drop to a whopping 68% since their November high – who said that Crypto was the volatile asset?!. The headline was a net loss of 200,000 subscribers over the past quarter and guidance for an expected loss of another 2 million subscribers in the upcoming second quarter.This sent a wave of fear through the markets as investors feared the risk associated with other technology stocks.
This saw the NASDAQ lose 1.5% overnight, which brought down the crypto market with it.
Tesla stocks dropped almost 5% in anticipation of their results report that came out this morning, however Tesla’s results have significantly outperformed expectations and hopefully may go some way in restoring some faith back into the market tonight.
Bitcoin
Bitcoin had a strong afternoon and evening in anticipation of another strong US market performance. The US pre-markets indicated that most indices would open 0.5% up and investor sentiment was high. The opening drop of 39% for Netflix dampened that mood significantly, resulting in the NASDAQ going deep into the red. Bitcoin followed this drop, losing over 3% over a 5-hour period down from $42.1 to its overnight low of $40.8k.
We have seen a 1% recovery this morning since the Tesla announcement.
This is exactly what I have indicated in my previous posts, that the correlation between the NASDAQ and Bitcoin is strong, so a continued Bitcoin and crypto run is very reliant on the performance of NDQ.
Looking at the Daily Chart, Bitcoin is still on track to get to $43-$44k, providing that the US markets manage to recover from its Netflix shock. We are still well inside the upward mid-term channel, posting higher highs and higher lows.
The MACD has just turned green, and a golden cross has just occurred, both being bullish signs. However, the daily stochastic is steadily rising, indicating that we are halfway through our short-term range and that we have about another $2k left in upside before moving into overbought territory, so that takes us to ~$43.5k before a pullback is likely.
We have the US Fed meeting on 4th May, so I am anticipating that the FUD will start mid next week as the market anticipates what the outcome of the Fed’s meeting will be and how that will impact the economy. Therefore I expect the pullback to start sometime next week, so hopefully we still have 2 strong days of performance before we head into the weekend.
Have a great day, trade safe. Craig
