Nvidia stock showed signs of recovery on Monday, Aug. 5, providing hope for investors across all asset classes that a buy-the-dip opportunity might exist. But is this just a temporary rebound?

Nvidia Stock Recap

On Aug. 5, Nvidia stock dipped to $90.69, but quickly bounced back above the $100 mark. This rebound occurred despite the Dow Jones dropping over 1,000 points and the S&P 500 and Nasdaq 100 index experiencing their first-ever intraday 1,000-point decline.

Altcoin Performance

Nvidia’s recovery mirrored gains seen in several notable altcoins. For instance, Dogecoin rose to $0.093, up over 16% from its lowest point. JasmyCoin, a popular Japanese cryptocurrency, increased to $0.021, marking a 35% rise from its daily low. Render Token saw a 25% increase from its weekly low, while Bitcoin traded at $54,500, and Ethereum rose to $2,440.

However, it remains uncertain whether these gains will hold due to the elevated risk in the financial market. This could be a dead cat bounce—a brief recovery before resuming a downward trend.

Market Risks and Patterns

The S&P 500 index has formed a high-risk rising wedge chart pattern on the weekly chart, which typically leads to more selloffs.

Correlation Between Tech Stocks and Cryptocurrencies

Technology stocks like Nvidia and cryptocurrencies often show some correlation. This explains why altcoins like Render and Jasmy rose during the morning session in the US, as investors bought the dip after they became oversold. On the daily chart, Render’s Relative Strength Index (RSI) moved to 26, while Jasmy and Dogecoin’s RSI fell to 24 and 27, respectively.

Potential Catalysts for Nvidia and Cryptocurrencies

Several potential catalysts could push Nvidia and cryptocurrencies higher. One major factor is the likelihood of the US moving towards a recession, as indicated by some financial analysts. If this is correct, the Federal Reserve might intervene by cutting interest rates in its September meeting. A significant interest rate cut could benefit cryptocurrencies and other risky assets, as seen during the Covid-19 pandemic when global stocks and cryptocurrencies surged.

The implied market probability of a 50 basis point cut by the Federal Reserve in September surged to about 80% as traders adjusted their expectations for the Fed’s actions.

Solid Earnings Reports

Another positive factor for stocks and cryptocurrencies is solid earnings reports, despite weaknesses from companies like Tesla and Intel. Over 70% of S&P 500 companies have reported their numbers, showing a blended revenue growth of 11.5%, the highest level since Q4 2021.

For Nvidia, the next crucial catalyst will be its financial results, set to be published on August 28. Analysts expect revenue to have risen to $28 billion from $26 billion in Q1.

Stay updated on the latest financial news and trends at Global Crypto News.

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