Correlation between Bitcoin (BTC) and Nasdaq 100 has declined this month after hitting a record high of 0.8 last month, according to a new Kaiko report.

While the Nasdaq closed the week on a positive note of over 7%, Bitcoin continues to trade in the $21,000 range. But Bitcoin remains mostly uncorrelated to the asset it has been repeatedly compared to, gold.

The correlation between Bitcoin and the precious metals asset is currently over 50%. But its correlation with the US dollar has alternated throughout the year between 0 and a negative 0.6.

Bitcoin and Nasdaq 100 have had their performance correlated for some time due to increased interest in crypto from institutional investors. But the recent rise in interest rates and fears of recessions seem to have affected Bitcoin more than tech stocks.

The sale of Bitcoin was conducted in cash

According to Kaiko, on-chain data reveals that the current sell-off in crypto has been caused by spot traders rather than the derivatives market.

According to the report, the trading volume of Ethereum (ETH) and Bitcoin has declined since the start of the year. After peaking in May 2021, volatility also started to decrease in September 2021.

But the weekly trading volume and price action has remained relatively stable and at the same levels since then.

According to the report, this shows that there has been a calculated effort on the part of investors to reduce the risk of their position. Thus, the decline is not due to a massive sell-off in the futures markets.

Additionally, funding rates in Bitcoin derivatives markets show that the futures market was not responsible for the sell-off. BTC perpetual futures funding rates have maintained a steady trend despite the steep price decline.

Funding rates are currently 0.005% above the neutral level. If the futures market was responsible for the sell-off, it would be negative, like Terra’s failure last month.