Bitcoin sees sharp decline in correlation with tech equities, Kaiko says
According to the new silk moth, the correlation between Bitcoin (BTC) and Nasdaq 100 has declined this month after reaching a record of .8 last month. report..
Nasdaq closed the week with more than 7% positive notes, while Bitcoin continues to trade in the $ 21,000 range. However, Bitcoin remains largely uncorrelated with gold, an asset that has been compared many times.
Currently, the correlation between Bitcoin and precious metal assets is over 50%. However, the correlation with the US dollar alternates between 0 and minus 0.6 throughout the year.
Bitcoin and Nasdaq 100 have been performing for some time due to the growing interest of institutional investors in cryptography. However, recent rises in interest rates and fears of a recession seem to have affected Bitcoin more than tech stocks.
Bitcoin sale was spot driven
According to Kaiko, data on the chain reveals that the current crypto sellout was caused by spot traders rather than the derivatives market.
According to the report, trading volumes of Ethereum (ETH) and Bitcoin have been declining since the beginning of the year. After peaking in May 2021, volatility also began to decline in September 2021.
However, weekly trading volumes and price behavior have been relatively stable and have been at the same level ever since.
According to the report, this shows that investors have made a calculated effort to mitigate the risk of their position. Therefore, this decline is not due to the sold out of the futures market.
In addition, Bitcoin’s derivatives market funding rate indicates that the futures market was not the cause of the sale. The funding rate for BTC permanent futures remains stable despite sharp price declines.
Financing is currently 0.005% above neutral. If the futures market is the cause of the sold out, it will be negative, similar to Terra’s failure last month.
