- A new report by Arcane shows that U.S traders account for 43 percent of all trading volume and that they tend to jump in on Monday and Tuesday.
- The data also showed that Bitcoin’s correlation with the S&P 500 is at its highest since October last year, making BTC prone to stock market shocks.
The U.S dominates the Bitcoin trading market, new data has shown. The data by Arcane Research revealed that U.S traders account for as much as 43 percent of BTC trading volume and that BTC’s 90-day correlation with the S&P 500 is at its highest since October last year.
In its weekly report, Arcane Research showed that this year, Bitcoin’s trading volume tends to be significantly higher during U.S stock market trading hours.
The Weekly Update: Week 2
?#Bitcoin’s 90-day correlation to the S&P 500 is currently at its highest since October 2020
?#Bitcoin trading volumes are at their lowest since July
?A new NFT platform launched with massive volumes in its first weekhttps://t.co/M5O5Eg30al
— Arcane Research (@ArcaneResearch) January 18, 2022
The six and a half hours from 9:30 a.m to 4 p.m Eastern Time account for 43 percent of Bitcoin’s 24-hour trading volume. This indicates that U.S traders tend to dictate the market even if they just trade for under 7 hours.
The data also showed that Bitcoin’s 90-day correlation with the S&P 500 is at its highest in four months. Arcane stated:
Currently, the S&P 500 seems to dictate the direction of bitcoin and the overall crypto market, evident by correlations reaching new highs. Bitcoin’s 90-day correlation to the S&P 500 is currently at its highest since October 2020.
The correlation challenges the age-old notion that Bitcoin is a safe haven. If investors were looking at it as such, its value would be inversely correlated with the stock market. The data indicates that Bitcoin currently qualifies as a high-return risk-on asset.
Lennard Neo, the research head at Stack Funds pointed this out recently, stating:
Bitcoin has been behaving more as a risk asset recently amidst market uncertainties. The markets are still split if BTC is an inflationary hedge or risk asset, and with the current macro climate, expect more volatility in the short term.
This correlation also means that the S$P 500’s movement can give traders a good indication of which way the BTC price is set to take. Today, the S&P is down by 86 points, or 1.84 percent while Bitcoin is up by a mere 0.70 percent.
Arcane also revealed that Bitcoin’s volatility is at its lowest level in more than a year as it continues to consolidate in the $41,000-$44,000. This could be because the trading volumes have also been quite low, the lowest they have been since July last year.
At press time, Bitcoin is trading at $42,075, giving it a market cap of $798 billion.