Nasdaq 100 falls around 4.5% as tech spending and rich valuations spark correction

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Nasdaq 100 slides 4.56% today

Highlights

Major technology companies in the Nasdaq 100 raised spending on artificial intelligence, cloud infrastructure, and data centers.
Janus Henderson and Centrifuge unveiled JQQQ, the first blockchain-native Nasdaq-100 Index fund, operating on the Stellar network.
Nasdaq 100 trades below major moving averages amid broad-based technical weakness, with a near-term trading range of 25,557 to 27,571 and a 73% probability of further downside.

Institutional blockchain fund debut as tech investment surge meets selling

Major technology companies within the Nasdaq 100 increased their investments in artificial intelligence, cloud infrastructure, and data centers. The index was reported to have entered correction territory following a series of declines amid heightened scrutiny of elevated spending and valuations. Janus Henderson, together with Centrifuge, launched JQQQ, an institutionally managed fund tracking the Nasdaq-100 Index and operating natively on the Stellar blockchain, marking the first blockchain-native fund for this index, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, views the Nasdaq 100’s 4.56% plunge as a shift to pronounced risk-off sentiment. He notes that index leaders are drawing scrutiny for rising spending and high valuations. The technical setup is fragile, with all moving averages broken and momentum indicators flashing caution. Kharitonov is wary of institutional launches like the blockchain-native fund, as underlying selling persists. He concludes, "Market structure remains firmly bearish, and I see little evidence yet for sustainable upside while sellers control all time frames."

Viktoras Karapetjanc, expert at Traders Union, sees opportunity despite the index’s recent correction. He highlights strong institutional interest with the launch of a blockchain-native Nasdaq-100 fund, which signals maturation and innovative access for investors. Karapetjanc believes ongoing tech investment in AI and cloud drives long-term value creation. He concludes, "The bullish structure remains fundamentally intact, and I expect the market will soon reward patient positioning as new institutional products stimulate demand."

Jainam Mehta, market strategist, observes high volatility and a downside gap keeping the Nasdaq 100 below major moving averages. He points to neutral momentum readings, with the CCI showing oversold levels that may attract tactical buyers. Mehta sees potential for sharp reversals near support at 25,557. He adds, "Traders should watch for a possible contrarian bounce if bearish momentum fades and sentiment diverges around key levels."

Seller dominance persists as momentum signals remain mostly bearish

Nasdaq 100 is trading below its 20-day, 50-day, and 200-day moving averages at 27,141, with those averages located at 29,491, 29,738, and 27,970. This points to seller dominance across all time frames. The immediate resistance is seen at 27,255, with the nearest support at 25,557. Longer-term resistance is reinforced by moving averages and the Ichimoku Kijun at 29,663, reflecting a broadly bearish structure even though the MA-50 remains above the MA-200. On momentum, both the MACD and ADX reflect a sell signal, with the RSI and Stochastic RSI both classified as neutral, while the Commodity Channel Index (CCI) signals an oversold condition. Bull/Bear Power (BBP) at -182.87 underscores persistent intraday seller pressure, backed by a negative Awesome Oscillator. The index opened with a downside gap, continued to trade near session lows, and exhibited marked intraday volatility.

Earlier, analysts noted that the Nasdaq 100 remained under downside pressure amid technical weakness and ongoing sector challenges. The latest developments reinforce this bearish outlook, with the index exhibiting persistent seller dominance and traders advised to watch the 25,557 support level for signals of further declines.

Source of Data: NDX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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