U.S. Macro Pressure Responsible For Entire Bitcoin Downtrend
There have been multiple sell-off trends recorded in bitcoin since the crash in December 2021. These sell-offs have been responsible for the decline in prices recorded in the digital asset over the last couple of months. Naturally, sell-off trends can be recorded on their magnitude depending on when the trading hours of a particular region are open. This time around, it seems that macro pressure on the U.S. market has been the culprit.
U.S. Traders Drive Sell-Offs
The sell-offs of the past two months have been especially brutal and have dragged down the year-to-date values. However, it seems that most of the sell-offs have been taking place during the daytime trading hours in the United States. This is apparent by looking at the year-to-date values during the U.S. trading hours in comparison to that of the European year-to-date value. The stark contrast unveils where most sell-offs had happened.
As it sits now, the year-to-date values during the U.S. trading hours have declined into the negative. It is sitting at -32.55% while its European counterpart is looking at positive year-to-date values of +16%. What this shows is that sell-offs for the past two months have mainly originated from American traders. This is even in comparison to the Asian trading hours which also show a more favorable year-to-date value compared to the U.S.
BTC sell-offs intensify during U.S. trading hours | Source: Arcane Research
Mostly, this is obvious due to the high correlation between bitcoin and the equities market for the past two months. It is also good to note that American traders are not the only ones using the macro markets to assess their risk in bitcoin. Since traders in other regions also use the equity markets such as the NASDAQ and the S&P500 as a way to assess their risk appetite, they may also be dumping bitcoin during the U.S. trading hours.
Recently, it has been obvious that there has been a lot of sell-offs happening once the U.S. markets open up for trading. This is evident in the fact that the price of the digital asset tends to recover during the early hours of the morning while the European and Asian markets are open. However, once the U.S. markets open for the day, the downtrends are usually apparent.
This puts bitcoin’s current weak point during the times when the American traders are active. As such, these trading hours could present a buying opportunity for interested parties, and even a way to execute quick short-term plays for fast gains.
However, it is important to note that the tide can change at any point. Sell-offs can often halt as dramatically as they begin. So, a change in the trend during the U.S. hours can affect short-term plays which cater to the trading hours sell-offs.
The price of the digital asset has recovered above $30,000 in the early hours of Wednesday at the time of this writing. If the sell-off trends continue, then the price of bitcoin may drop below this level before the day is over.
Featured image from Bitcoinist, charts from Arcane Research and TradingView.com