Bitcoin’s (BTC) price continues to rise even as coronavirus-induced instability rocks the stock markets.
Bitcoin is trading near $13,420 at time of writing, a 2.77% gain on the day.
That marks a fresh 16-month high for the cryptocurrency, which is now up 25% for the month and 87% on a year-to-date basis.
Bitcoin’s on-chain data, too, is showing no signs of investor trepidation.
The number of daily deposits to cryptocurrency exchanges fell to a nine-month low of 26,889 on Monday.
Further, the total number of bitcoins held on exchanges slipped to a two-year low of 2,478,799 BTC, according to data source Glassnode.
So the bullish mood continues for bitcoin, even though the global stock markets suffered losses and Wall Street’s benchmark equity index, the S&P 500, fell nearly by 2% on coronavirus concerns Monday.
The decline in exchange deposits suggests investors are unperturbed by the risk aversion in traditional markets and see low odds of bitcoin suffering an equity market-induced sell-off.
Investors typically move coins from their wallets to exchanges to liquidate holdings when expecting a price slide, and take direct custody of their assets when the cryptocurrency is expected to rally.
In effect, we appear to be seeing a weakening of the positive correlation between bitcoin and the S&P 500 seen since the March crash.
“The decline in transfers to exchanges despite risk-off in equity markets is a bullish sign,” Matthew Dibb, co-founder, and COO of Stack Funds, told CoinDesk over WhatsApp.
The cryptocurrency is likely to stay strong in the coming weeks, he added.
Bitcoin’s options market is also retaining bullish bias.
The one-, three- and six-month put-call skews, which measure the cost of puts relative to calls, continue to hover below zero, a sign of calls – bullish bets – drawing higher prices (or demand) than puts – bearish bets.
The cryptocurrency suffered a minor drop to $12,700 during Monday’s U.S. trading hours only to chart a quick recovery to levels above $13,000.
“The next resistance to take out is $13,800 (June 2019 high).
“If bitcoin breaks below $12,700, we will take action and decrease our exposure further,” Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG told CoinDesk in a Twitter chat.
Disclosure: The author holds small positions in bitcoin and litecoin.