What is the impact of OTC flow on cryptocurrency prices?

3 answers

• Dec 18, 2021 · 3 years ago
  Yes, the OTC flow can have a significant impact on cryptocurrency prices. When large institutional investors or whales engage in OTC trading, it can create buying or selling pressure that affects the overall market sentiment. This can lead to price movements in the cryptocurrency market. Additionally, OTC trades are often conducted off-exchange, which means they do not directly impact the order books of regular exchanges. As a result, OTC flow can sometimes cause price discrepancies between the OTC market and the regular exchange market, leading to arbitrage opportunities for traders.
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• Dec 18, 2021 · 3 years ago
  OTC flow definitely plays a role in shaping cryptocurrency prices. When there is a high demand for a particular cryptocurrency in the OTC market, it can drive up the price of that asset. Conversely, if there is a large supply of a cryptocurrency being sold OTC, it can put downward pressure on the price. OTC flow can also influence market sentiment and investor confidence. If there is a surge in OTC buying activity, it can signal positive sentiment and attract more investors to enter the market, potentially driving up prices. On the other hand, a significant increase in OTC selling can create fear and uncertainty, leading to price drops.
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• Dec 18, 2021 · 3 years ago
  According to BYDFi, a leading cryptocurrency exchange, the impact of OTC flow on cryptocurrency prices is undeniable. OTC trading is often preferred by institutional investors and high-net-worth individuals who trade large volumes of cryptocurrencies. When these big players enter the OTC market, their buying or selling activity can have a ripple effect on the overall market. The OTC flow can create a sense of FOMO (fear of missing out) among retail investors, leading to increased trading volume and price volatility. It's important for traders to monitor OTC flow and consider it as a factor when making investment decisions.
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