Risk stays under pressure as we look towards European trading later | investingLive

Wall Street had a bad showing yesterday and that is carrying over to today as the risk selloff continues to run to start the new week. Tech shares were feeling heavy with Nvidia dropping by nearly 2%, while Bitcoin is facing heavy selling after a break under $100,000. The cryptocurrency is now dropping to test the $90,000 mark as the deleveraging across markets continue to pick up this week.

It could be a case of the cryptocurrency being the one that’s leading the overall risk mood and animal spirts in markets into more defensive territory. And if so, the technical signs are definitely not looking good.

The fall in Bitcoin now takes out the 61.8 Fib retracement level of the swing higher from April to October and there’s not much other key support levels to be mindful of on the way down. The added blow in the drop this week is that Bitcoin has now erased all of its gains for the year, holding lower by over 3% year-to-date currently.

Elsewhere, we’re still seeing the selloff continue with S&P 500 futures now down 0.8% on the day. Tech shares are the ones leading the drop with Nasdaq futures down 1.0% as we get to the handover from Asia to Europe.

If the rout in Bitcoin is any indication or some added precursor to big names getting rid of their entire Nvidia stakes, it is that the risk rout could get a whole lot worse before it gets better. Watch this space. The risk mood is now the biggest driver of trading sentiment.