#bitcoin☀️ risks ‘sharp weekend price swings’ as #ETFs✅ suck up liquidity

Bitcoin has become increasingly prone to volatile weekend price swings since the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States, according to a recent report by Kaiko Research.

In the August 12 report, Kaiko’s crypto analysts highlighted that Bitcoin's liquidity has become more concentrated during weekdays, especially in BTC/USD markets. The report noted a general decline in weekend trading volatility since 2021, and previous findings have shown a drop in Bitcoin’s weekend trading volumes as institutional and ETF-related activity has increased.

However, the shift toward more concentrated weekday trading has also increased the risk of sharp price fluctuations over the weekend, particularly during periods of market stress, Kaiko pointed out.

For instance, during the significant Bitcoin sell-off on August 5, when the price dipped below $50,000, Kaiko observed "liquidity fragmentation" across the #CryptoMarkets . This fragmentation led to price discrepancies, especially on smaller, less liquid exchanges.

Kaiko reported that during this sell-off, Bitcoin's price moved 14% between the U.S. market's close on Friday, August 2, and its reopening on Monday, August 5—a pattern similar to other major sell-offs since 2020.

“Unlike traditional markets that close on weekends, crypto markets operate 24/7. This means sell-offs that start on a Friday can intensify uncertainty over the weekend, amplifying the impact on prices,” the report explained.

Kaiko reported that a $100,000 Bitcoin sell order on August 5 caused significant slippage across exchanges, with up to 5.53% on the BTC/yen pair on Zaif and nearly 5.5% on the BTC/euro pair on KuCoin. USD stablecoin pairs on #BITMEX and Binance.US saw up to 4% slippage. Since January, U.S. Bitcoin ETFs have attracted $17.3 billion in net inflows, holding 4.7% of Bitcoin’s supply and significantly influencing its liquidity.

Source - cointelegraph.com

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