Bitcoin's Recent Sell-Off Driven by Multi-Strategy Hedge Fund Trades

According to PANews, Augustine Fan from SignalPlus has analyzed that the recent wave of Bitcoin sell-offs is primarily driven by multi-strategy hedge fund trades dominating the macro market. These strategies include arbitrage, long-short positions, and leverage operations aimed at maximizing returns across asset classes. In the Bitcoin market, a common multi-strategy trading method is basis trading, which involves purchasing spot Bitcoin (often through ETFs) and shorting Bitcoin futures to profit from the price difference. However, when the price spread narrows or the market changes, the profitability of basis trading decreases, leading to funds exiting positions and concentrated selling of Bitcoin and ETF shares. Fan noted that this liquidation pressure has amplified the sell-off over the past week, especially amid increased volatility related to tariffs. Despite this, the sentiment of 'buying the dip' remains prevalent in the market. Fan mentioned that valuations of stocks outside major blue-chip companies are relatively stable compared to historical averages, and hard economic data may outperform the rapid deterioration of soft data. Consequently, the market generally perceives the current situation as a 'buying the dip' opportunity, with expectations to gradually absorb the impact of tariff volatility.