Experience the buzz of recent Bitcoin price volatility in Asia, driven by cutting-edge automated trading algorithms that closely monitor US exchange-traded fund (ETF) flows. According to Bloomberg, these algorithmic responses to daily ETF data are creating dramatic swings in Bitcoin prices during Asian trading hours.
Unveiling the Impact of Trading Algos on Bitcoin Prices
Witness the sharp decline in Bitcoin, marking its steepest drop in a month, triggered on a Tuesday morning in Asia. The release of US ETF flows data signaling a net withdrawal of investments catalyzed this downturn.
Shiliang Tang, president of Arbelos Markets, shed light on how algorithmic trading maneuvers these market shifts. “Bots can auto-scrape this data and trade accordingly,” Tang explained. “That seems to be the current trend.”
Since the introduction of several Bitcoin ETFs in the US on January 11, attracting a whopping $12 billion in investments, Bitcoin has experienced notable highs and lows. The surge in inflows in the first half of March led Bitcoin to a record high of $73,798, but has now plummeted by up to 17.6% from this peak due to fluctuating inflows and outflows.
These flow patterns have significantly impacted Asian market returns, with strong performances in February and early March tapering off later in the month. The ripple effect of algorithmic protocols doesn’t just strike the spot market but extends to derivatives, with Coinglass reporting liquidations of approximately $357 million in bullish crypto bets on a single Tuesday.
Charlie Morris, Chief Investment Officer at ByteTree Asset Management, emphasized the gravity of ETF flows for Bitcoin, highlighting its contrast to gold. With 5.5% of Bitcoin held in ETFs versus only 1% for gold, ETF flows play a pivotal role in driving Bitcoin’s market trends.
Key players like Jakob Kronbichler from Clearpool Finance stress the market’s responsiveness to ETF flow data and view the recent correction as a natural breather in a market brimming with excitement.
Spot ETFs Attract $40 Million Inflows
Spot Bitcoin ETFs saw a $40.3 million inflow yesterday, predominantly fueled by Blackrock’s hefty $150.5 million contribution that significantly bolstered the market. In contrast, ARK faced a tough day with $87.9 million outflows, despite witnessing $200 million inflows the previous week. Grayscale’s GBTC saw modest outflows of $81.9 million.
Renowned analyst WhalePanda speculated on the outflows, hinting at profit-taking after Q1 and potential reasons for the market movements. At present, BTC is trading at $66,398.
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