Head of SignalPlus: The intensification of multi-strategy hedge fund trading has triggered recent BTC sell-offs, but the market still shows a sentiment for buying on dips

PANews reported on March 17th, according to Augustine Fan, the head of SignalPlus, that the recent sell-off wave of Bitcoin was mainly triggered by multi-strategy hedge fund trading dominating the macro market. These multi-strategy trades include arbitrage, long and 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. This involves buying spot Bitcoin (usually through ETFs) and shorting Bitcoin futures to profit from price differences. However, when this spread narrows or market conditions change, profits from basis trading decrease leading to funds exiting their positions and concentrating on selling off Bitcoins and ETF shares. Fan pointed out that this liquidation pressure has amplified sales in the past week especially against a backdrop of increased volatility related to tariffs.

Despite this though there still exists a "buy-the-dip" sentiment in the market. Fan stated that valuations for stocks outside major indices remain relatively stable compared with historical averages; moreover hard economic data may be better than rapidly deteriorating soft data. Therefore it's widely believed that it's still a "buy-the-dip" market which is expected to gradually absorb tariff fluctuations' impact.