Bitcoin (BTC) fell to less than $ 75,000 on April 6, and the S & P 500 futures were the lowest since January 2024, put pressure on the traditional market. In addition, due to the initial panic, WTI petroleum futures fell to less than $ 60 for the first time in four years. However, the market later recovered slight losses, allowing Bitcoin to recover $ 78,000.
Bitcoin’s high correlation with traditional markets tends to have a short life.
Some analysts claim that Bitcoin has entered the Bear market with a 30%price modification of cycle peaks, but historical data offers numerous examples of stronger recovery. In particular, Bitcoin’s high correlation with traditional markets tends to have a short lifespan. Some indicators suggest that traders are simply waiting for better access.
40 -day correlation: S & P 500 gift vs. bitcoin/USD. Source: TradingView / COINTELEGRAPH
Bitcoin’s recent performance was closely related to the S & P 500, but this correlation fluctuates greatly over time. For example, as the two asset classes moved in the opposite direction for nearly 50 days, the correlation was changed to voice in June 2024. In addition, the correlation metrics exceeded 60% thresholds for 272 days (38% of the period) for two years, but this figure is not statistically crucial.
The recent drop in bitcoin prices to $ 74,440 reflects increasing uncertainty in the traditional market. In the past, there was an abnormally high correlation between Bitcoin and traditional assets, but it did not last for a long time. In addition, most major technology shares are currently trading at more than 30% at the highest level.
Between 2022 and 2024, gold failed to be “value repository.”
Bitcoin is one of the top 10 assets worldwide, even if the market capitalization of $ 1 trillion is used. Gold is often considered the only reliable “value repository”, but this perspective overlooks volatility. For example, gold fell to $ 1,615 by September 2022, and it took three years to recover the maximum of $ 2,075.
Gold boasts a $ 21 trillion market capitalization, 14 times higher than Bitcoin, but the gap between executives’ ETF (SPOT EXCHANGE-Traded Fund) assets is $ 330 billion in gold compared to Bitcoin’s $ 9.2 billion. In addition, the musical instruments listed on Bitcoin such as GrayScale Bitcoin Trust (GBTC) debuted on the exchange in 2015 and provided gold for the market for 12 years.
The importance and elasticity of Bitcoin ETF in BTC derivatives
From the point of view of derivatives, the Bitcoin permanent future (reverse swap) is maintained in an excellent state and the rate of financing is close to zero. This indicates the demand for balanced leverage between LONG and shorts (sellers). This is in contrast to the period between March 24 and March 26, when the financing rate has changed to 0.9%every month, with a stronger demand for weakness.
Bitcoin permanent future 8 hours of financing ratio. Source: LAevitas.ch
In addition, the amount of $ 442 million in the long position between April 6 and April 7 was relatively humble. For comparison, when the price of Bitcoin dropped 12.6% between February 25 and February 26, the liquidation of the leverage strong position was $ 998 million. This suggests that merchants are better prepared or less dependent on leverage.
Finally, China’s demand for Stablecoin provides additional insights on market sentiment. In general, strong retail demand for cryptocurrency encourages Stablecoins to trade at more than 2% of the official US dollar ratio. On the contrary, premiums with less than 0.5% are often feared when merchants try to terminate the encryption market.
relevant: Michael Saylor’s strategy is to stop Bitcoin Buys and deeper than $ 87K
USDT Tether (USDT/CNY) vs. us dollar/cny. Source: OKX
Even if the price of Bitcoin drops to less than $ 75,000, the USD Tether (USDT) ‘s insurance premiums remained at 1%on April 7. This suggests that investors are likely to convert their position into Stablecoin, and that the US stock market is waiting for the US stock market to reach the bottom before returning to Cryptocurrency Investments.
Historically, Bitcoin has shown that it has a lack of correlation with S & P 500. In addition, almost 0 BTC futures financing rate, a total of millions of future liquidation and China’s 1% stabble recon’s premium pointed out that the price of Bitcoin can be awarded for $ 75,000.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.