Bitcoin

Bitcoin has become more susceptible to wild weekend volatility since the launch of spot Bitcoin exchange-traded funds (ETF) in the United States, according to Kaiko Research.
In an Aug. 12 <a href="https://research.kaiko.com/insights/how-is-crypto-liquidity-fragmentation-impacting-markets" target="_blank" rel="noopener nofollow">report</a>, Kaiko’s crypto analysts noted Bitcoin’s liquidity has become more concentrated on weekdays, particularly in BTC/US dollar markets.
It noted that weekend trading volatility has generally declined since 2021 and has previously reported that Bitcoin’s weekend trading <a href="https://cointelegraph.com/news/weekend-bitcoin-trading-falls-from-tradfi-and-etf">volumes have&nbsp;</a><a href="https://cointelegraph.com/news/weekend-bitcoin-trading-falls-from-tradfi-and-etf">dropped</a>&nbsp;as institutional and ETF activity has grown.
But the increased move to weekday Bitcoin <a href="https://cointelegraph.com/learn/swing-trading-vs-scalping">trading</a> “heightens the risk of sharp weekend price swings during market stress,” Kaiko wrote.
Related: <a href="https://cointelegraph.com/news/crypto-etfs-expand-new-asset-types-indexes-grayscale-executive">Crypto ETFs will expand to new asset types, indexes — Grayscale executive</a>
During the last large-scale Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) sell-off on Aug. 5,&nbsp;<a href="https://cointelegraph.com/news/bitcoin-breaks-below-50000-august-2024">when it dipped below</a> $50,000, Kaiko noted “liquidity fragmentation” in the crypto markets, leading to price discrepancies across exchanges, particularly affecting smaller, less liquid exchanges. 
It noted that during the sell-off, Bitcoin moved 14% between the US market close on Friday, Aug. 2, to its reopening on Monday, Aug. 5, “similar to major sell-offs since 2020.”
<blockquote data-ct-non-breakable="true">
 “Unlike traditional markets that close on weekends, crypto markets operate 24/7. This causes sell-offs that start on a Friday to worsen weekend uncertainty, amplifying price impacts.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-08/96a801d5-7c37-4506-b199-b4fdcbf4f1dc.png" alt="Bitcoin risks ‘sharp weekend price swings’ as ETFs suck up liquidity" title="">
 <figcaption style="text-align: center;">
 The latest sell-off saw Bitcoin’s price move almost as much as during the US banking crisis in early 2023. Source: Kaiko Research
 </figcaption>
</figure>
Meanwhile, Kaiko said a $100,000 Bitcoin sell order during the Aug. 5 sell-off would have produced significant <a href="https://cointelegraph.com/learn/crypto-trading-basics-a-beginners-guide-to-cryptocurrency-order-types">price slippage</a> depending on the exchange and trading pair.
Zaif’s Bitcoin/yen pair saw slippage of up to 5.53%, while KuCoin’s BTC/euro pair reached nearly 5.5%. Meanwhile, US dollar stablecoin pairs on BitMEX and Binance.US saw slippage reach up to 4% on the day.
The 11 <a href="https://cointelegraph.com/news/morgan-stanley-bitcoin-etf-united-states-wealth-advisors-securities-exchange-com">spot Bitcoin ETFs</a> in the US have drawn in $17.3 billion in net inflows since January and currently hold about 4.7% of Bitcoin’s supply, giving them a reasonable hold over the cryptocurrency’s liquidity.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-price-prediction-ethereum-altcoins-crypto-trader-roman-hall-of-flame-cointelegraph/">Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman</a>

Bitcoin risks ‘sharp weekend price swings’ as ETFs suck up liquidity

Cointelegraph

Other articles published on Aug 13, 2024

Riot Platforms Raises Stake in Bitfarms to 18%, Continues Strategic Accumulation

Pump.fun's High Failure Rate Revealed: 98.6% of Memecoins Never Launch

Veteran Trader that Made Millions on Shiba Inu (SHIB) Predicts Percentage 3,455 Increase for This...

What to expect from the latest inflation report?

ZKX Protocol Closes, Triggering Over 50% Drop in ZKX Token Value

New Cryptocurrency Releases, Listings, & Presales Today – Suiswap, Wall Street Games, Wrapped eETH

Join our free newsletter for daily crypto updates!