Today, we will answer the basic question – when is the best time to trade cryptocurrencies?
Bitcoin has become the most popular cryptocurrency in the world. In 2017 alone, its value increased from $1,000 per coin to over $20,000. This meteoric rise has led to a surge in interest in investing in cryptocurrencies.
The high volatility in cryptocurrencies trading has made millionaires out of many investors, while also scalding several others. So, you’re left wondering, when is the best time to trade cryptocurrencies? Right?
Well, most investors who trade cryptocurrencies rely heavily on the knowledge applied to trade stocks and FX. Although this model works well for some investors, Economists have gone on to show that the cryptocurrency market relies more on momentum.
The implication of this is that if the cryptocurrency market is performing well, it will likely continue in its bullish run for a short period. Hence, the best time to trade cryptocurrency is when the cryptocurrency market shoots up with a more than 20% increase in value in a week.
Essential Factors That Determines The Best Time To Trade Cryptocurrencies
Cryptocurrencies trade 24/7 all-year-round
With the advent of cryptocurrencies, the cryptocurrency market remains open all year, including weekends. The implication of this is that traders inching to overtrade can trade in the cryptocurrency market over the weekend.
The weekend trading accounts for a mere 28% of the weekly trading volume. Over time, it has led to a 40% rise in bitcoin prices.
Although there is no waiting period when it comes to trading cryptocurrencies, as an investor, you can get a nice slice of the cryptocurrency pie trading on weekends.
Price surge with weekend’s lower trading volume
Here, market sizes or lots come to play. Since volumes traded over the weekend are lower, it means the cryptocurrency market experiences a relatively high price surge with fewer trading activities. This market trend is also observed during the time of days when major markets like the US market are inactive.
Although the market can experience shocking moves on weekends, especially when the Asian market is wide awake. Hence trading on a weekend should be done with caution, especially between 23:00 to 3:00GMT when the market is messier. That leaves you with a relatively calm trading window between 3:00 to 23:00GMT when trading weekends.
CFTC report has a role to play
The Commodity Futures Trading Commission publishes detailed reports of the market operations and the dynamics that affect the market to give traders a better understanding of the market.
Since this report is published every Friday, traders act on it during the weekend trade. Hence, you can bet on a surge in cryptocurrency prices during the weekend based on the CFTC report.
The Asian market has a role to play
Amazingly, the Asian market controls a large portion of cryptocurrency trading. Hence, news coming out from South Korea can cause significant market moves, especially when businesses open by 9:00 local time (00:00 GMT).
Hope we were able to answer the basic question – when is the best time to trade cryptocurrencies?
Based on factors and indices, you can trade cryptocurrency all day during the weekdays. If you’re ready to ride the stormy cryptocurrency market wave, then the weekend might be the best time for you to do so. But, a cautious ride is advised.
- 4 Benefits of Cryptocurrency Hardware Wallets
- Blockchain 101: Beginner’s Guide to Cryptocurrency
- 8 Best Crypto-Friendly Banks you Should Bank with
- 9 Ultimate Cryptocurrency Security Guide for 2022
- What Is The Minimum Amount I Can Invest In Bitcoin?
- List Of The Best Countries To Trade Cryptocurrencies
- HODLing Vs Short-term Trading – What Do US Crypto Investors Want?