•Crypto whales, entities that own large amounts of digital currencies, appear to have started snapping up Bitcoin at cheaper prices as the popular cryptocurrency continues to fall in the wake of the debut of spot ETFs in the US.
•Bitcoin has fallen nearly 19% to the $40,000 level since the ETFs began trading in the US on January 11. Meanwhile, digital currency prices have varied over the past 24 hours, as they continue to fluctuate since the official launch of Bitcoin funds in America.
•This led some cryptocurrency whales to hunt Bitcoin after its price declined on the digital asset exchange (Bitfinex), one of the top 10 exchanges in terms of trading volume. Bitfinex whales are known for making waves in the market.
•Data shows that over the weekend, Bitcoin traded at a premium of $100 on Bitfinex compared to the global average price. At the time of writing, the premium is close to $70, which is significantly higher than other exchanges, including Coinbase and Binance.
•Someone on Bitfinex has been buying Bitcoin non-stop for 3 days in a row via the Time Weighted Average Price (TWAP), which is why Bitcoin on Bitfinex has been trading at a huge premium.
•Time-Weighted Average Price (TWAP) is an algorithmic strategy used to segment large orders over time. This strategy is often used to reduce the impact of a large order on the market by distributing the large order into smaller quantities and executing them at regular intervals over time.
•Whales usually use this strategy to execute their orders within a specific period of time, so they trade to keep the price close to the price that reflects the real market price. It is preferable to use this strategy to provide a better execution price if the order volume is larger than the available liquidity, and if there is an expectation of a period of high price volatility with no clear trend up or down.
•Meanwhile, TWAP buying continued on Tuesday, as sales from bankrupt FTX and outflows from Grayscale Bitcoin Trust (GBTC) pushed prices below $39,000 for the first time since early December.
•The low demand is also evidenced by renewed interest in bullish leveraged bets on Bitfinex.
•The data also shows that the number of open BTC/USD long trades, or bullish leveraged bets, rose nearly 8% to more than 73,000 contracts in one week.
#Follow.us To see more digital currency news ✅🔥💵
