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Bitcoin Market Intelligence - Issue #7

Jan Wüstenfeld
Jan Wüstenfeld
Hey everyone,
Today I will take a closer look at bitcoin’s current price dynamics split up by trading hours, more precisely Asia, EU and US trading hours. I will focus on where the selling pressure on the latest price corrections has been and is potentially coming from.
Summary:
Asia and EU trading hours 30-day price change negative ->potential capitulation of investors from these markets
US trading hours 30-day price change positive -> buying or at least no significant selling of US market participants on the aggregate
Trading volume between EU and US trading hours very similar in magnitude and direction
Asia hours trading volume in comparison significantly lower
During which trading hours are the 30-day price changes negative?
Glassnode provides data on the 30-day price change (month-over-month price change) split into:
  1. Asia trading hours (8am and 8pm China Standard Time [00:00-12:00 UTC]),
  2. EU trading hours (8am and 8pm Central European Time [07:00-19:00 UTC], respectively Central European Summer Time [06:00-18:00 UTC]) and
  3. US trading hours (8am and 8pm Eastern Time [13:00-01:00 UTC], respectively Eastern Daylight Time [12:00-0:00 UTC]).
I will start with Asia trading hours and move from east to west.
Until the start of the price correction during the first week of June, month-over-month price changes during Asia trading hours have been primarily positive. Since June 09, 30-day bitcoin price changes have only been negative, and these price drawdowns have been quite substantial.
Graph 1: Bitcoin: Asia Mont-over-Month Price Change (Source: Glassnode)
Graph 1: Bitcoin: Asia Mont-over-Month Price Change (Source: Glassnode)
Similarly, negative month-over-month changes can be observed during EU trading hours since April 08. However, the magnitude of the price drawdowns compared to the Asia trading hours is much lower.
During EU trading hours, the 30-day drawdowns on the recent price correction have been primarily below $3k, whereas during Asia trading hours, they have been between $5k and $7k. This data suggests that European and Asian market participants may have been capitulating on this month’s price correction.
It is essential to point out here that we cannot say for sure that the drawdowns are caused by Europeans or Asians capitulating. These drawdowns may also be caused by market makers or whales using market conditions (trading volumes etc.) that are only prevalent during these trading hours to their advantage and to move the price in their desired direction. Also, keep in mind that there is an overlap between the three trading hour groups in the data.
Graph 2: Bitcoin: EU Month-over-Month Price Change (Source: Glassnode)
Graph 2: Bitcoin: EU Month-over-Month Price Change (Source: Glassnode)
Similarly to EU trading hours, price drawdowns in April and May can be observed for US trading hours. However, as opposed to during Asia and EU trading hours, we can observe positive month-over-month price changes during US trading hours since June 08. Since then, only five days show negative price changes that, in comparison, are also significantly lower and negligible.
Graph 3: Bitcoin: US Month-over-Month Price Change (Source: Glassnode)
Graph 3: Bitcoin: US Month-over-Month Price Change (Source: Glassnode)
As I mentioned before, the differences in price changes may not necessarily be driven by selling or buying by investors from the discussed time zones. They could also be caused by market makers or whales using market conditions specific to one of the time periods to their advantage.
One important factor here might be the trading volume. Theoretically, during lower trading volume hours, it should be easier for whales to influence the price.
To see whether there is a difference between US, Asia and European trading hours, I have aggregated trade volume data for the last thirty days split up according to the time frames used by Glassnode mentioned earlier using data by bitcoinity (big shoutout to Jannik who pointed me in the direction of that data source).
The summary statistics are shown in Table 1, and the development over the last 30-days is shown in Graph 3.
The summary statistics show that EU trading volume is very similar to that of the US. Other than EU trading volume, the mean trading volume for Asia hours over the observation period is substantially lower than that during US trading hours.
Table 1: Summary Statistics Trading Volume Asia, EU and US Trading hours last 30d (Source: Bitcoinity)
Table 1: Summary Statistics Trading Volume Asia, EU and US Trading hours last 30d (Source: Bitcoinity)
These similarities and differences trading volumes can also be observed graphically.
US and EU trading volumes are moving in a very similar fashion in terms of direction and magnitudes. From that point of view, it might indeed be the case that European investors are capitulating whereas on the aggregate US investors are accumulating.
In, contrast during Asia trading hours, trading volume is often moving below that of the other two.
Whether that difference in trading volumes between the US and Asia is enough for whales to sway bitcoin prices during Asia trading hours is hard to say. But at least for Asia trading hours, this cannot be ruled out.
Graph 4: Trading Volume Asia, EU and US Trading Hours Last 30 Days (Source: Bitcoinity)
Graph 4: Trading Volume Asia, EU and US Trading Hours Last 30 Days (Source: Bitcoinity)
In summary Asian participants seem to have flipped from buyers to sellers in June or at least the month-over-month change is positive. European market participants have similarly been selling this month’s price correction, but have also been selling during the months before that. US participants appear to have flipped from selling to majorly buying with the onset of the price correction during the first week of June.
While we can’t say with certainty that it is actually investors selling or buying depending on the place they are living it is interesting data nonetheless as it provides valuable insights into when during the day increased selling or buying may be happening compared to 30 days ago.
Stay safe out there! Don’t trust! Verify! Make up your own opinion and consider multiple sources. 
Jan Wüstenfeld
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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.
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Jan Wüstenfeld
Jan Wüstenfeld @JanWues

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