March 9 – On March 15th, the bitcoin market had its most volatile week on record, so what happened this week?
一、Bitcoin hits third-largest price drop in history
Bitcoin: Percentage change in price per day (Source: CoinMetrics)
Bitcoin’s price is up 36% year-on-year from a year ago, despite its plunge last week.
二、Bitcoin and the stock market record the highest correlation in history
1, after last week’s plunge in the cryptocurrency market, the 90-day correlation between bitcoin prices and the Standard and Poor’s 500-stock index reached its highest level ever.
2. In just one day, the correlation between Bitcoin and the Standard and Poor’s 500 index rose from a paltry 0.1 to more than 0.5.
3. Although this correlation may fall sharply later, there is no doubt that the simultaneous decline of Bitcoin and traditional financial markets has dealt a blow to the concept of Bitcoin’s “safe-haven assets”.
Figure below: Bitcoin – 90-day correlation of the Standard and Poor’s 500 index (Source: CoinMetrics Screenshot)
三、As the price of bitcoin fell, the shanzhai currency also suffered. However, Bitcoin market share has not been affected and remains relatively stable
1, March 9-15, is a historic week for cryptocurrencies, with a significant impact on the entire market.
2, however, bitcoin’s market share has not been affected and remains relatively stable at a time when all cryptocurrency prices have been hit hard.
3, last week, the majority of cryptocurrencies fell by more than 50%.
Fourth, the market is still very afraid
Last week, the index of fear and greed fell by a staggering amount, dropping to 10 at one point (the source of the data, as shown in the chart below, alternative.me). This situation also indicates that all indicators are beginning to weaken. The Fear and Greed Index, which fell to 5 in August 2019, may not reflect real market sentiment because it is based on very specific data such as volume, volatility, social media, survey data, dominance, and Google trends. But everyone can feel that the current market is more fearful than it was in August 2019.
V. Bitcoin ownership restructuring! Selling lets trading soar
Many Bitcoins were traded last week, and the average daily trading volume of bitcoins reached unprecedented levels last week since the peak of trading in 2019. Bitcoin changed hands on March 12, and the average real transaction volume on March 12 surged to $1.5 billion, more than double that of the week.
Bitcoin price collapse leads to big swings
Last week’s transfer of a large number of bitcoins was a matter of great concern and may be of much greater importance than people think.
Bitcoin’s 30-day volatility jumps to more than 7% – a figure not seen since 2014
Bitcoin futures market also experienced high volatility
1. With the recent decline in the spot price of Bitcoin, the futures market has also become extremely volatile.
2. The premium rate we usually see on futures has disappeared, and now most contracts are trading at below the spot price.
3. For example, Derbit’s March Bitcoin futures contract trades at $300 below the spot price, which means an annualized premium rate is down 80%.
4. Even those bitcoin futures contracts that expire in September are currently trading at lower prices than the spot.
5. There is no doubt that bear market sentiment will certainly be reflected in the futures market.