What are these unusual trading volumes of Bitcoin?

[Rickylee]

Hi All,

I have been watching Bitcoin trading volumes for some time and it appears that there is some massive buying and selling of Bitcoin occurring in individual trades. On analysis these massive trades can represent 10% of the daily trading volume and occur over just 2 - 3 minutes.

It occurs at random times of the day and is accompanied by huge price swings (as would happen in any market).

The other interesting thing is that they occur across numerous exchanges at once, almost like it is coordinated.

This is clearly some big players in the market. What I am trying to understand is whether this is market manipulation OR are the big players dumping their Bitcoin OR a combination of both OR something else I haven't considered.

See below the volume vs price chart showing the hug trades and corresponding price movements.

I have also included the trading volumes from different exchanges all showing an increase of trading volumes at the same time.

Links, exchange volumes.

https://data.bitcoinity.org/markets/tradespm/3d?c=e&t=a

Price vs volume.

https://www.cryptocompare.com/coins/btc/analysis/USD?period=2W

Would love to hear any thoughts.

 

[tommcginnis]

You should compare that to the ES, and characterize any differences from there.
(Don't be surprised if there are none.)

 

[Rickylee]

That's great, thanks.

 

[FX_Hedge]

I trade cryptos with my own funds automated and I have seen this activity. I do know of several groups working large scale automated arb trades and that could be part of this additional volume. That trade will disappear once the large IB/HF groups move in on this casino to take it over. Apparently, two large banks that currently clear FX trades will be clearing Crypto trades by year end. I'm not talking about Futures but actual Crypto pairs just like an FX pair. Making over 15% monthly returns arbing BTC is a nice ride until it all ends - or until one of the exchanges they use disappear overnight.

 

[Rickylee]

Thanks FX_Hedge. Wouldn't an arb trade traditionally be a very small trade, relative to the size of the market? An arb trade is looking for differences of price in different markets so that it can take advantage of them, an arb trade would be an almost instantaneous trade also. I may be wrong, I have only just read up on an arb trade.

I just have the feeling that those making these trades, or overseeing the automated trades, must know that the price will move significantly, and these trades are being made frequently, if that is the case then surely this is a form of price manipulation?

 

[FX_Hedge]

The groups trading this way have been doing it for over a year so they are trading many round trips each day and position sizing has grown over this time.