MW The 'bro bubble' is bursting, says Bank of America strategist. Here are the key levels to watch for the Nasdaq, Palantir and more.

By Steve Goldstein

The so-called 'bro bubble' - the testosterone-fueled rally in cryptocurrencies and other speculative tech stocks - is popping, and one strategist identifies the key lines in the sand for closely watched assets.

Bank of America strategist Michael Hartnett said the breaking point for bitcoin (BTCUSD) came when it couldn't hold the volume-weighted average price since the election of $97,000. Now it's fallen below $80,000. Tesla Inc. $(TSLA)$, too, is well below its post-election VWAP of $371, closing Thursday at $282.

Hartnett identified the VWAP lines in the sand for other key assets: $639 for Meta Platforms Inc. $(META)$, $80 for Palantir Technologies Inc. (PLTR), $519 for the Nasdaq 100 ETF QQQ and $597 for the S&P 500 ETF SPY.

He said 5,783 on the S&P 500 SPX is the first strike price for a so-called Trump put because that would mark the level in which "Stocks Down Under Trump" headline would begin - "below which investors currently long risk would very much expect and need some verbal support for markets from policymakers."

The most important price to watch, Hartnett said, isn't the S&P 500 but the iShares Core S&P Small-Cap ETF IJR - if it can't break above its 2021 highs despite a supportive backdrop of tariffs, tax cuts, deregulation and potentially Fed cuts, it "tells you bonds outperform stocks."

Bank of America's analysis of fund flows found a record $4.7 billion weekly inflows into gold and $27.2 billion into stocks, but $2.6 billion out of cryptocurrencies.

The $26.9 billion in inflows into U.S. equities was the largest inflow of the year.

Bank of America's own private clients acted somewhat differently, with the second-largest week of equity selling on record and the second-largest week of T-bill selling since 2012.

Hartnett also detailed some of the conversations he had with clients in Dubai and London.

The investors seemed suspicious of the S&P 500 but thought European stocks were a "rent" and not an "own." They were as attracted to long-term bonds as they have been this decade.

Hartnett pointed out that narratives and moods are shifting faster than positions, as tracked by Bank of America's monthly fund-manager survey.

-Steve Goldstein

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February 28, 2025 07:01 ET (12:01 GMT)

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