The word "that" is optional is english, unlike in other languages, like french and spanish where it is mandatory. So either sentence is correct.

Here "that" is used as a conjunction. Without it, it could be two unrelated sentences: "I think you don't think." "I think. You don't think." "I think that you don't think."

Both are correct but 'I think you are' sounds better.

Both

Technically, "I think that you are..." is grammatically correct and should be used in formal publications. However, most native speakers say "I think you are..." in everyday conversation.