Bitcoin Algorithmic Tracking of ETF Flows Creates Volatility in Asian Markets
Highlights
- Algo trading put pressure on the BTC price after the ETH flows turned negative.
- Bitcoin ETF inflows still remain more impactful than the Gold ETF inflows.
- All eyes are on the upcoming Bitcoin halving event that can create a supply shock and drive prices higher.
Bitcoin investors in Asia have been experiencing major volatility due to the fallout of the automated trading protocols that react to flows taking place in the US Bitcoin ETFs. Every day, updates on the demand for spot Bitcoin ETFs ripple through the cryptocurrency market during Asian trading hours, following the conclusion of US share trading.
On Tuesday, Bitcoin and the broader crypto market experienced their most significant decline in a month during the Asian morning session, driven by data indicating investors were withdrawing funds. Shiliang Tang, president of principal trading firm Arbelos Markets said:
“From an algorithmic trading perspective, bots can basically auto-scrape this data and buy and sell based on this. It seems that’s basically what is happening.”
Bitcoin ETF Inflows Cool down
On the other hand, the Bitcoin ETF market also experienced some volatility recently. Inflows reached their peak in the initial two weeks of March, coinciding with BTC’s rally to its all-time high of $73,798. Since that pinnacle, the sector has experienced intermittent periods of outflows, leading to a decline of approximately 11% from the token’s historic peak.
Charlie Morris, Chief Investment Officer at ByteTree Asset Management, highlighted that approximately 5.5% of Bitcoin is held within the broader ETF sector, contrasting with gold’s 1% allocation. According to Morris, this makes ETF flows more impactful for Bitcoin than for gold.
Tang further noted that this flow pattern elucidates the varying market returns during Asian trading hours. There was a notable strength visible in February and early March, followed by a decline in later March.
Additionally, the liquidation of bullish crypto wagers, totaling about $354 million on Tuesday according to Coinglass data, is due to algorithmic protocols offloading BTC. This activity can trigger ripple effects in the derivatives market.
The Bitcoin price tanked over 6% on Tuesday moving all the way lower to $65,400. The industry is closely awaiting the upcoming Bitcoin halving which could induce a major supply shock in the market while driving the prices higher.
- Bitcoin ETFs Record $2.2B Weekly Inflows as BTC Price Surges Past $120K
- Nomura Eyes to Ripple Dominance in Crypto Trading in Japan as Demand Rises
- Sharps Technology Plans $100M Buyback to Boost Solana Treasury as SSK ETF Hits Record $382M AUM
- Will Bitcoin Reverse to $115K Max Pain Price amid Crypto Options Expiry Today?
- Cardano Gets 100 Million User Exposure With Brave Integration, Whales Scoop 70M ADA
- Bitcoin Price Hits $120K, Is Citigroup’s Bold Q4 Prediction in Motion?
- Pi Network Price at Risk of Another Crash as Mysterious Whale Stops Buying
- Solana Price Eyes $360 After Bullish Retest As VisionSys AI Deploys $2B Treasury Strategy
- Cardano Price Forecast As Hashdex Listing Fuels Optimism For $1.27 Breakout
- BONK Price Rally Ahead? Open Interest Jumps as TD Buy Signal Flashes
- Shiba Inu Price to Surge as Whales Buy and Team Commits to Shibarium Growth
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
