Cumberland, the cryptocurrency division of Chicago-based trading firm DRW Holdings, is reporting a surge of Bitcoin bids worth more than $4.9 million each.
The dotted lines below show 13 orders of at least 1,000 BTC each were traded in less than an hour, starting after midnight on April 2nd.
Desk Update: The post-trade analysis of Monday evening’s price action revealed a series of large bids (>1,000 BTC per order) within a 1 hour span, which appear to be actual buyers vs. forced liquidations. pic.twitter.com/UiuHLoCbPr
— Cumberland (@CumberlandSays) April 4, 2019
Cumberland suggests the trades were actual buyers as opposed to bids that were simply placed. According to global head of trading at Cumberland, Bobby Cho says the bids were executed and economically binding.
On Wednesday, Cumberland noted that Bitcoin’s 10% increase was a first within eight weeks. Cumberland, which started its over-the-counter (OTC) trading desk back in 2014, says,
“We are watching for $5,000 (the next even number) and $5,500-$5,800 (strong resistance points which have previously caused several uptrend and downtrend selloffs to and from $20,000).”
Meanwhile, Bloomberg added algorithmic trading to a list of suspects behind the BTC price spike when Bitcoin broke the $4,200-resistance level on Monday, sending it north to over $4,800 in under an hour and a half.
According to Bloomberg,
“The number of algorithmic crypto traders has jumped in the last seven months, with 17 algo or quantitative funds started since September, according to Crypto Fund Research.”
While an influx of algorithmic traders could lead to market manipulation, among other concerns, crypto hedge fund founder Travis Kling of Los Angeles-based Ikigai Asset Management says algorithmic trading can restrict volatility.
In an interview with Bloomberg, Kling says,
“Humans will let things get out of whack in a more extreme manner than machines will. [Algo traders] by definition put a lid on volatility.”