Bitcoin Kill Zones: What Are They & Why They Matter?

 
 
 
 

Kill zones define a point of high liquidity in a market. They have traditionally been used in forex trading but considering that bitcoin is traded 24/7 365 days a year, it is also very relevant in this market.

There are three specific kill zones, each having its’ own significance:

1. Asian Kill Zone

This typically takes place between 00:00-03:00 UTC. It is referred to as the “institutional zone”, signifying the start of any new trends for the day or week. It can also can be referred to as a reloading period after the American session.

2. London Kill Zone

This takes place usually between 06:00-08:00 UTC. London has long been considered the financial hub of the world. Traders will use this kill zone to begin establishing their positions in relation to the given trend.

3. New York Kill Zone

This kill zone typically arises between 11:30-14:00 UTC. With America having the worlds largest economy while being relatively late in the global trading day, it is not uncommon to see violent price swings when this liquidity hits the market.

Bitfinex BTC/USD – July 6th-News Release

 

Legend:
Orange- Asian Kill Zone
Green- London Kill Zone
Red- New York Kill Zone

The bitcoin volume seems to increase at every kill zone. London and New York zones spike noticeably higher. Traders in the Asian kill zone may be wary about starting a new days trend without fully knowing where it could go.

OkCoin BTC/CNY – July 6th-News Release

 

The New York kill zone continues to generate the highest liquidity, even in the CYN market. The Asian Kill zone starts to take shape in the CNY market. For example, on the 9th the USD market showed no significant increase in volume in the Asian kill zone; however in the CNY market there was a spike.

Why Kill Zones Matter

Observing activity in kill zones gives traders an insight for how the market is going to perform throughout the day or week. The Asian Kill Zone sets the tone, followed by the London kill zone establishing positions based off what the market is saying. Finally, massive amounts of liquidity come pouring in from the New York kill zone, sending the price up or down based on what the market portrayed in the previous two kill zones.