NASDAQ: Sell Off Deepens This Morning
As of the time of writing, around 8.00 a.m. CET, the Nasdaq is down 1.02 percent, trading at 24 560, and sits 6.60 percent below the highs reached on October 30 at 26 250. Meanwhile, BTC USD is down 6.40 percent, trading once again below the 90k level. There is no clear news driven catalyst behind the recent downward move. It appears to be driven by technical conditions and profit taking after a prolonged rally that has generated substantial gains for some skilled medium to long term investors.
It is also worth noting that on Wednesday evening we will have the earnings results from NVIDIA, along with the FOMC minutes, followed on Thursday by the release of the non farm payroll data.
The index itself needs little introduction, so we will move directly to the daily chart. The main point we wish to highlight is the index concentration, especially considering its market capitalisation weighted structure. This is different from the Dow Jones, for example, which is price weighted. The top five companies alone account for 56.22 percent of the Nasdaq, and the group broadly associated with exposure to artificial intelligence accounts for nearly 70 percent. This concentration naturally carries significant risk.
Technical Analysis
The upward channel that has guided the rally since late May 2025 has been clearly broken between yesterday and today. Only a close above 25 050, which would require roughly a two percent intraday recovery, would change this situation. Similar to the S and P 500, both the 21 day and the 50 day moving averages have been crossed to the downside. Price action is currently testing the lower band of the Bollinger Bands, which are widening, without yet cutting them. The ATR ten period has increased, indicating a daily range of roughly 550 points.
None of these signals are constructive. In the coming hours and days, we will likely need to monitor lower support levels, starting with the 24 000 to 24 250 area. Below that level, which would imply a more meaningful and still hypothetical correction, the 23 000 zone becomes important.
For traders who follow Fibonacci retracements, the 23.6 percent retracement from the early April 2025 lows lies around 24 000, while the 38.2 percent retracement is situated near 22 655.
In short, we may be heading into a period of turbulence. The key word is indeed turbulence. Regardless of direction, we believe that the increase in volatility typical of environments like this one will offer several intraday opportunities both downward and upward. It is a favourable setting for intraday traders, although buy and hold investors may need to withstand some discomfort.
