A recent report from blockchain data research firm Arcane Research reveals that US market trading hours account for 43% of Bitcoin's daily trading volume, a trend that persists even on weekends. The study also highlights that Bitcoin's 90-day correlation with the S&P 500 has reached its highest level since October 2020, making Bitcoin increasingly susceptible to stock market fluctuations.
US Trading Hours Dominate Bitcoin Transaction Activity
Arcane Research's analysis indicates that Bitcoin trading volume significantly increases during US market operating hours. From January 1st of this year, activity during US trading sessions accounted for an average of 43% of the 24-hour trading volume, up from 36% during the period from November 1, 2021, to January 16, 2022.
The report visually illustrates that trading activity tends to surge immediately at the US stock market open. Bitcoin's price behavior appears closely tied to the performance of the S&P 500 index.
Interestingly, US traders have shown particularly high activity at the beginning of the trading week, with up to 50% of Bitcoin's trading volume occurring on Mondays and Tuesdays in recent weeks, before settling back to around 40%. Given that US market hours (9:30 AM to 4:00 PM Eastern Time) represent less than 30% of a full day, this 40% trading volume share is particularly significant.
This data suggests that US traders—or those preferring to trade during US hours—dominate Bitcoin trading activity and demonstrate a clear preference for trading early in the week. This pattern also indicates that US equity markets currently exert substantial influence on Bitcoin's price performance.
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Bitcoin and S&P 500 Correlation Reaches Multi-Year High
The S&P 500 appears to be increasingly dictating the direction of both Bitcoin and the broader cryptocurrency market. According to the report's analysis, the 90-day correlation between Bitcoin and the S&P 500 has reached its highest level since October 2020.
This strengthened correlation means Bitcoin has become more vulnerable to stock market volatility, but it also suggests that traditional equity market movements can provide traders with valuable insights into potential Bitcoin price trends.
The report further notes that Bitcoin's volatility has dropped to its lowest level in over a year, with prices consistently consolidating within the $41,000 to $44,000 range. This period of relative stability is likely attributable to decreased trading volume, which has reached its lowest point since July of last year.
Understanding Market Dynamics and Trading Patterns
Several factors contribute to the concentration of trading activity during US market hours. The United States remains a global financial hub with extensive cryptocurrency infrastructure, including major exchanges, institutional investment vehicles, and regulatory frameworks that facilitate trading.
The alignment between traditional market hours and cryptocurrency trading activity suggests growing institutional participation in Bitcoin markets. Professional traders and investment firms typically operate during standard business hours, contributing to increased volume when US markets are open.
Additionally, news flow and market-moving information often emerge during business hours, creating natural trading opportunities that attract increased participation from market makers and active traders.
Frequently Asked Questions
Why does the US trading session account for so much Bitcoin volume?
The US market features extensive cryptocurrency infrastructure, including major exchanges and institutional investment products. Additionally, many market-moving news events and financial announcements occur during US business hours, naturally attracting trading activity.
How does stock market correlation affect Bitcoin's price?
High correlation with traditional indices like the S&P 500 means Bitcoin often moves in similar directions to conventional stocks. This relationship can make Bitcoin more susceptible to macroeconomic events, interest rate changes, and broader financial market sentiment that affects traditional equities.
What causes low volatility in Bitcoin markets?
Periods of low volatility typically occur when there's reduced trading activity, uncertainty about market direction, or balanced buying and selling pressure. Extended consolidation phases often precede significant price movements in either direction.
Should traders focus exclusively on US market hours?
While US hours show concentrated activity, significant price movements can occur at any time. Global markets operate continuously, and developments in other regions can impact prices outside US trading hours.
How reliable is the correlation between Bitcoin and traditional markets?
Market correlations constantly evolve and can change rapidly during periods of financial stress or unusual market conditions. While currently high, the relationship between Bitcoin and traditional indices may weaken as markets evolve.
Does weekend trading differ significantly from weekday activity?
While the report notes US trading influence persists on weekends, volume typically decreases during these periods. However, unexpected news or market developments can still generate significant weekend trading activity.