The price of Bitcoin fell to $67,000 on October 21, erasing gains from the previous three days; however, the indicators for Bitcoin derivatives remained stable. Generally, if large investors or arbitrage trading firms expect Bitcoin to decline further, these indicators should reflect more volatility.
The "Bitcoin futures premium rate" typically maintains between 5% to 10% in a neutral market, and when the premium exceeds 10%, it indicates bullish market sentiment. According to Cointelegraph, despite Bitcoin retesting the $67,000 support level on October 21, the annualized premium (basis rate) remained above 9%.
The Bitcoin options market further reinforced the view of stability in the derivatives market. The 25% delta skew indicator shows that the trading price of sell options is lower than that of buy options under the same conditions.
Typically, a skew of -7% to +7% is considered neutral, while the current indicator is at the boundary between neutral and bullish markets.
Overall, derivatives traders have not shown panic regarding Bitcoin's recent price drop. If traders expect Bitcoin prices to decline further, the skew should move towards zero or higher. Overall, the Bitcoin derivatives market continues to show resilience.
Bitcoin prices have not decoupled from stocks
Yesterday's drop does not seem to be limited to the Bitcoin market; from the price charts alone, Bitcoin's price movements appear to be similar to the intraday performance of the stock market.
Although Bitcoin is generally viewed as an asset uncorrelated with traditional markets, it has often shown complete decoupling from the S&P 500 index. However, over the past month, the 40-day correlation between Bitcoin and the S&P 500 index has remained above 80%, indicating that the two asset classes are closely related.
Unlike the negative or negligible correlation observed between Bitcoin and the S&P 500 from mid-July to mid-September, recent data suggests that both markets are driven by similar factors. This hypothesis is supported by the rising correlation between Bitcoin and gold, which exceeded 80% on October 3.