Trading Bots in Asia React to ETF Flows Data After Market Closure, Leading to Pronounced Swings
Bitcoin investors in Asia are experiencing significant price swings as automated trading protocols react to flows data from US exchange-traded funds (ETFs) that hold the cryptocurrency.
The impact of these automated trading algorithms is particularly felt during Asian trading hours following the close of US share trading, when daily figures on the demand for spot-Bitcoin ETFs are released, according to a report from Bloomberg .
The recent market drop in Asia serves as a good example of the influence of these automated trading protocols .
On Tuesday, Bitcoin experienced its worst decline in a month during the Asian morning, as investors reacted to the flows data indicating a withdrawal of funds from Bitcoin ETFs.
Bitcoin ETF Flow – 01 April 2024
All data in. $86m net outflow pic.twitter.com/XvBwCUYvVE
— BitMEX Research (@BitMEXResearch) April 2, 2024
Shiliang Tang, the president of the principal trading firm Arbelos Markets, told Bloomberg that trading bots can automatically analyze and react to this data, resulting in buying or selling actions.
The automated response is believed to be a major contributing factor to the pronounced swings in the market.
Since their launch on January 11, US Bitcoin ETFs have attracted a net inflow of $12 billion.
The inflows peaked in the first half of March, coinciding with Bitcoin’s record high of $73,798.
However, the sector has experienced periods of outflows since then, and Bitcoin has declined approximately 11% from its all-time peak.
This pattern of flows helps explain why market returns during Asian trading hours were particularly strong in February and early March but weakened later in March.
The impact of algorithmic protocols dumping Bitcoin extends beyond the
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