By Chris Hollingworth 
Bitcoin (BTC) faced resistance above $85,000 on March 14, following a 1.9% gain in the S&P 500 index. Traders are now questioning the sustainability of the bull market as it has been over a week since Bitcoin last traded at $90,000. Despite a 30% drop from its all-time high of $109,354 on Jan. 20, Bitcoin metrics from a derivatives standpoint have shown resilience.
The Bitcoin basis rate, which measures the premium of monthly contracts over spot markets, has rebounded from bearish levels. Traders typically seek a 5% to 10% annualized premium for longer settlement periods. While the current 5% rate is lower than two weeks ago, it remains within neutral territory.
Bitcoin’s price action has closely followed the movements of the S&P 500, indicating that investor risk aversion factors may not be directly linked to the cryptocurrency. This challenges the notion of Bitcoin as an uncorrelated asset, at least in the short term. However, central banks are expected to introduce stimulus measures to prevent a recession, potentially benefiting scarce assets like Bitcoin.
Although Bitcoin is anticipated to reclaim the $90,000 level once the S&P 500 recovers from recent losses, panic selling of risk-on assets could persist in a worst-case scenario. Professional traders are currently not utilizing Bitcoin options for hedging, as indicated by the 25% delta skew metric, reflecting a healthy derivatives market.
Examining Bitcoin margin markets provides insight into trader sentiment. The long-to-short margin ratio at OKX shows longs outweighing shorts by 18 times, reminiscent of sentiment levels seen when Bitcoin traded above $100,000 in late January. Presently, there are no signs of stress or bearishness in Bitcoin derivatives and margin markets, offering reassurance to investors.
