Market insiders struggle to explain Asia's typically bearish crypto trading sessions

It's become an omnipresent meme in the social media channels frequented by bitcoin traders.

"This weekend I want to embrace the pump," well-known trader Alex Kruger tweeted last Friday. "Someone tell Asia to stop selling."

No matter how well bitcoin is trading over the course of the day in the West, it almost seems like a guarantee that traders in Asia will turn green charts to red while Westerners are sleeping.

The numbers suggest that there's some truth behind the meme. As data from The Block Research suggests, trading activity does really turn bearish around the time traders in Asia fire up their trading terminals. In fact, the most bearish hour for bitcoin is 2:00 a.m. UTC, which is 10:00 a.m. in Hong Kong. 

What's behind the phenomenon? Even some of the most prominent crypto traders can't put their finger on an exact cause.

"Asia selling has been going on for years," Darius Sit, a co-founder at trading firm QCP, said in a message to The Block. Sit's theory is that the phenomenon occurs not because Asian traders are so bearish, but instead because traders in the West are so bullish. "It's actually more a matter of how much the U.S. buys in my opinion."

Sit added that if the price of bitcoin ultimately goes up despite all the selling in Asia, that's a good indication that the U.S. ended up buying more than Asia sold. 

Whatever is behind the overall trend, the pattern gets reinforced by signal trading algorithms, said Richard Rosenblum, co-founder of trading shop GSR. There's also more institutions buying crypto stateside, he said. "There's where institutional pockets of capital are."

Others have theorized that miners play a role. Sam Bankman-Fried, CEO of Hong Kong-based crypto exchange FTX, told The Block that Asia's bearish trading could be driven by bitcoin miners — most of whom are based in China. They could be selling bitcoin to pay for day-to-day operations, he said.

Recent data suggest otherwise, however. Last week, CoinMetrics senior analyst Karim Helmy told CoinDesk that "BTC-denominated gross inflows and outflows of mining wallets have both remained stable as have net flows." 

If it isn't miners doing all the selling, then something psychological might be at play, offered Bankman-Fried.

"In general, there is this extremely actively maintained collective imagination in the West around the ideal of HODLing, which often overrides the notion of 'taking profit,'" he said in a direct message. "I think this is a lot less powerful in Asia — so I think some of it is just 'crypto is up a lot so lots of people in Asia are taking profit and not bothered by breaking the brotherhood of hodlers."