Bitcoin spikes outside US hours and traders could ‘take advantage’ — Analyst

For years, Bitcoin tended to dip during Asia trading hours, but something changed after spot Bitcoin ETFs were launched.

Bitcoin (BTC) has seen most of its daily gains come outside U.S. trading hours ever since the launch of spot Bitcoin ETFs, which could present an opportunity for traders, according to an analyst.

The trend is a seeming reversal from the last two years, where most gains were concentrated during U.S. trading hours. Digital research firm 10x Research Markus Thielen suggests the new trend allows investors to capitalize on frequent small profit margins.

“Traders can take advantage of this information and buy Bitcoin ahead of the US trading hours and sell a few hours later,” Thielen told Cointelegraph.

On April 4, Bitcoin rallied approximately 2.6% outside U.S. hours while prices only rose around 0.6% during U.S. hours.

Bloomberg ETF analyst Eric Balchunas also noted in an April 5 post on X that “the vast majority of the 40% gains” in Bitcoin since spot Bitcoin ETFs were introduced on Jan. 11 happened outside regular U.S. market trading hours.

U.S. trading hours are the operating hours of the New York Stock Exchange (NYSE) and Nasdaq stock exchange, running from 2.30 pm to 9 pm UTC.

At the time of publication, Bitcoin is currently trading at $68,400 with Cointelegraph recently reporting a 64% growth in Bitcoin during the first quarter of 2024.

Buying Bitcoin before market open

Thielen explained that investors, including those from other time zones, often anticipate surges in ETF inflows by buying Bitcoin before the market opens:

“We also noticed through our data analysis that Bitcoin tends to rise during the 1-4 hours before U.S. ETFs start trading on that day, a sign that there is likely front running of the ETF flow occurring,” he added.

On April 4, Bitcoin experienced a slight 2.6% rise in the four hours before the opening of the U.S. market, climbing from $65,593 to $67,308.

However, Thielen noted that U.S. investors tend to take advantage of the market spread between the spot market and the futures market:

“The buying flow during US trading hours appears mostly arbitrage – buying Bitcoin Spot ETFs but selling CME-listed Bitcoin futures as hedge funds pocked the futures premium,” Thielen stated.

Related: Bitcoin is hedge against ‘horrible’ gov’t fiscal policy — Cathie Wood

It’s not the first time an asset has been singled out for gains outside U.S. trading hours. In June 2022, two ETF funds, the NightShares 500 ETF and the NightShares 2000 (NIWM), were launched to take advantage of the overnight increases in U.S. stocks.

According to a report from the Financial Post in July 2023, the products were discontinued just one year later because other factors, such as off-hours announcements, data releases, and earnings reports, can diminish performance.

Before the introduction of spot Bitcoin ETFs, it was understood that Asian investors did more of the selling during Asian market hours.

In March 2022, Cointelegraph reported that investors based in Asia have generally been sellers, while those in the U.S. and EU have been buyers for the previous two years.

Glassnode researcher and report writer “Checkmate” pointed out that US and European investors offered general bid support for the past two years. However, Asian markets generally offered lower buying support through Q1-Q3 of 2021 and produced heavy selling pressure.