The 13.3% drop in Bitcoin (BTC) price between April 12 and April 13 forced many traders out, primarily those who had leveraged their positions. This significant movement triggered $387 million in forced liquidations of long positions and reduced the open interest by $5.4 billion. At first glance, the price action and its effect on the derivatives markets suggest a decreased risk appetite.

Yet, cryptocurrency traders are accustomed to volatility and often overreact during uncertain times. A closer examination is necessary to determine whether the retest of $61,500 was sufficient to instill fear or to signal that the path to $72,000 and a potential all-time high after the Bitcoin halving is now less probable.

Did Bitcoin fail to provide a reliable store of value?

Despite the modest recovery to $63,500 on April 15, the overall sentiment among traders has dampened, making it challenging to support the narrative of Bitcoin as 'digital gold’. Additionally, the price movement exposed weaknesses in the spot Bitcoin ETF, particularly as holders were unable to sell over the weekend. This situation demonstrated the limitations of indirect exposure to Bitcoin through such instruments.

Recent inflows into spot ETFs in the U.S. have significantly influenced Bitcoin’s price, even when accounting for outflows from Grayscale’s GBTC. The sector has amassed $55 billion in assets under management over three months, bolstered by high-profile visits from sales teams at BlackRock, Fidelity, Bitwise, and VanEck to institutional clients and top asset managers.

Gold’s reputation as a store of value remains unchallenged, especially given its price stability during recent global political uncertainties and escalating conflicts in the Middle East. The metal is trading at $2,350, maintaining its level over the past week after reaching a $2,432 all-time high on April 12.

Analyst Tom Linn suggests that recent price movements confirm investors do not view Bitcoin as a safe haven, in contrast to gold, which appreciated following news of military conflicts on April 12. However, this analysis may overlook the fact that gold markets not operate over the weekend, and other dynamics, such as excessive leverage, could have impacted Bitcoin’s performance.

Historical data reveals that the price actions of Bitcoin and gold are rarely synchronized. The correlation metric ranges from -1, indicating that select markets move in opposite directions, to +1, which signifies perfect and symmetrical movement. A score of 0 would represent a lack of any correlation between the two assets.

The data underscores that Bitcoin is not correlated with gold, contradicting claims that the cryptocurrency has failed as a store of value. This highlights the advantage of possessing an asset that does not have a direct relationship with traditional financial assets.

Bitcoin derivatives held firm during the dip to $61,500

To determine if professional traders have grown more pessimistic about Bitcoin, an analysis of BTC monthly futures contracts is crucial. In neutral markets, these contracts typically feature a premium of 5% to 10%, reflecting the longer settlement period.

The data shows that the annualized premium for BTC futures was largely unaffected by the recent price correction to $61,500, as the indicator maintained above the 10% neutral-to-bullish threshold.

Related: Hong Kong green lights first spot Bitcoin ETFs – Law Decoded

To fully assess the market sentiment, it is also essential to examine the Bitcoin options skew metric. Typically, a skew metric exceeding 7% indicates expectations of a price decline, while a skew below 7% suggests bullish sentiment.

Over the past two weeks, the BTC options 25% delta skew has remained within a neutral range, suggesting a balanced demand for bullish and bearish strategies. Another significant fact is that there was no evidence of panic when Bitcoin tested the $61,500 support on April 13. In summary, the market data does not indicate any significant concerns or a decrease in investors’ optimism.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.