Crypto Twitter likes to complain and meme about bitcoin markets turning bearish when Asia-based traders come online, but data suggests that Bitcoin likes to pump on Friday and Saturday, and dump on Sunday and Monday.
According to analysis from the Block and internal data at Redeeem, Sundays and Mondays are some of the worst time periods for bitcoin. Surges on the weekends since the beginning of May account for 40% of price gains since 2020.
The most glaring examples were Bitcoin's longstanding peak at $19,666 came a Saturday in December 2017, followed by a sharp decline on Sunday and Monday the following week. Three years later, Bitcoin peaked again at $41,900 on Saturday night in United States, before dropping sharply on Sunday and Monday and kicking off a 30% price decline.
Many critics of Wall Street question whether banks can handle the digitization of our global economy while relying on exchanges that are closed 100 days a year between weekends and holidays. This could explain why Bitcoin, which trades 24/7, gets more attention on Fridays and Saturday.
Bitcoin has an enormous reliance on Tether (USDT). Most of the biggest bitcoin purchases come through ACH and wire transfers of U.S. Dollars on exchanges. Even though $10 billion of Tether inflows is only 1.4% of Bitcoin’s $700 billion market cap, the fraction of Bitcoin’s daily transaction volume for USDT accounts for is closer to 70%, which is over 10X more than the US Dollar itself.
This would explain why Sundays and Mondays might be bearish for Bitcoin, since USD purchases into Tether have been delayed for 24-48 hours and the market is dominated by margin trading and technical analysis.
According to Bitcoin.com, many miners in China have been short selling bitcoin since 2018 to hedge against falling digital asset prices. While in the long term it’s easy to see that Bitcoin continues to see massive price appreciation, there are endless reasons to short bitcoin on shorter time periods.
One Chinese miner interviewed explained that a large number of local miners are short selling as an act of self-defense against volatility. He said that unless they short sell BTC, some miners will be “ultimately eliminated.”
Lastly, corporate paychecks are usually paid on the 1st and 15th, and paid on Fridays if it falls on a weekend, which could explain some of the positive price action on Fridays and Saturdays, followed by profit taking on Sundays and Mondays. We can't blame China for everything :)