The Weekend Whipsaw for BTC is Back

It’s widely known that when trading volumes over the weekend are at their lowest, BTC’s price swings tend to be the most violent.

As more institutional interest pours into the BTC markets, traders who typically keep regular office hours leave the weekends pretty much like a wild west where retail traders hold court. Thinner volumes mean that relatively smaller amounts can cause massive price swings and this past weekend was no different as traders (primarily retail) chased BTC up to set a new record above US$61,000.

And as often happens, that new record was promptly undermined moving into Monday as Asian traders sold down BTC. It also didn’t help that over the weekend a large cache of BTC was quietly spirited into cryptocurrency exchange addresses in preparation for a large sale.

BTC fell by almost 10% yesterday as traders abandoned pandemic themes in both tech stocks and cryptocurrencies and bank and energy stocks saw a resurgence. That correction on Monday dragged down the stocks of companies closely linked with BTC, including the likes of MicroStrategy and Riot Blockchain. Tesla suffered doubly being both a pandemic growth stock and with its investment in BTC.

Debate is raging over whether BTC’s seemingly relentless ascent is sustainable – the benchmark cryptocurrency has soared some 1,000% in the past year alone, fed on a heady recipe of stimulus, loose monetary policy, institutional interest and a staple diet of speculation.

The most recent correction can however probably be tied not so much to the macro narrative, but the stirring of some older BTC wallet addresses that are alleged to have cashed out, with projections suggesting that as many as 18,000 Bitcoins being sold off in rapid succession on Monday.

Longer term however, BTC is still very much a battle of the narrative, and it’s perhaps only timely that vintage investors in the cryptocurrency are looking to lock-in some of their dollar gains. The irony though is palpable.