Compared to trading on the stock or other commodity markets, trading on the cryptocurrency market is different. On many exchanges, the market is accessible every day of the week, 24 hours a day. Although cryptocurrency exchanges are open 24/7, the level of liquidity may vary according to the time of day. This suggests that there may be a small variation for traders trying to forecast market shifts. Instead of comparing the current share price to its position at the close of trading the day prior, cryptocurrency traders look at the price that was in place exactly 24 hours ago.
At crypto reset time, which commonly occurs between 8 a.m. and 4 p.m., trading operations begin. In this article, we’ll go over why it’s critical to monitor and maintain track of the crypto reset time while trading.
What’s the Best Time to Trade?
Due to the global and ongoing nature of cryptocurrency trading, traders face a number of obstacles, including the choice of when to trade. When trading volume and liquidity (the number of counterparties accessible at any given time for you to withdraw money or enter a deal) are at their highest levels, those who wish to make large deals must identify these times (how many times a coin changes hands at a given time).
Volatility is less of an issue for new traders or those who want to place smaller bets. Even so, customers have the option to trade on more trustworthy platforms because those have less room for price manipulation or massive orders to affect pricing.
Investors in decentralized finance (Defi) tokens and spot traders, who buy and sell assets with quick delivery, face challenges in determining the best times to trade.
Be Wary of Weekends
US equity dealers should not trade cryptocurrency on the weekends. So how should we assess the weekend’s trade activity?
Crypto trader and market observer Cantering Clark made the remark, “Simply, wiser money drops out on weekends,” in reference to funds controlled by businesses and experienced investors. He noted that algorithmic trading bots and market makers, also known as liquidity providers, are often active on the weekends. Trading is less enticing on the market, he said.
A graph of actual volatility from Genesis Volatility signals a decrease in volatility during the weekend. In general, traders prefer volatility since it presents opportunities for profitable trading.
On traditional stock markets like FX, weekend trading has traditionally been viewed as being sluggish. Knowing this, banks would influence the market to encourage changes. Since cryptocurrency has the same issue, it was long believed that any weekend activity was “evil” and should be avoided. If bitcoin rises over the weekend, traders usually expect the market to fall over the next week.
Markets are More Active During Reset Times
The fact that crypto trading hours are open round-the-clock, every day of the week, changes how we analyze daily numbers. Having a start price and a closing price does not necessarily mean that the market began or ended at these prices. Because bitcoin trades throughout those times, it just indicates that a coin had a different value at 0:00 and 23:59. There is no real close or true open.
For want of a better phrase, a currency is being exchanged and has a set price if it is in trading. Furthermore, because the bitcoin market is open on the weekends, any price chart will appear smoother. There will be abrupt increases and decreases, but they will naturally result from commerce. There won’t be any spikes or peaks as a result of market closures or after-hours trading.
Mondays and Fridays are Best for Trading
Historically, traders have had their best trading results on Monday, followed by Friday and Saturday. What about the hours of the day that are most profitable for trading? The markets are busiest at 12 p.m. ET, per research.
The daily closing of a cryptocurrency market is significant for the same reasons that make it so in the stock market. For traders and supporters who might not have the time to watch each transaction for the whole of the day, the daily close in the market offers a quick overview of how the cryptocurrency is doing.
However, past performance and trends do not ensure future results, just like with any investment. There is no guarantee that trading on these days or at these hours will provide better (or any) results for a specific trader or investment. Furthermore, it’s important to remember that these trends could change over time.
Observe the Market to Make Sound Decisions
Making smarter bitcoin investing decisions may be possible if you are aware of the fundamental supply and demand laws that govern cryptocurrency value and the factors that influence them. Numerous factors, such as news, media, events, and laws pertaining to cryptocurrencies, have a big impact on the cryptocurrency market. Nevertheless, you should always conduct your own research, take price changes into account, and never invest more money than you can afford to lose.
The media’s role in the financial market is to disseminate knowledge and emotion. Firm news and events that receive extensive media coverage can have an impact on investor behavior. Reputable financial media outlets have the authority to influence markets. Additionally, studies on the influence of social signals on Twitter show that while emotional valence precedes both of these patterns, growing opinion polarization and trade volume predict rising Bitcoin values.
The Takeaway
The cryptocurrency markets are highly erratic. When trading or investing in cryptocurrencies, it is advisable to exercise caution due to their extreme volatility and to always keep an eye out for when they reset. However, unlike when trading stocks or bonds, bitcoin trading is available 24/7/365, so you won’t be limited by market hours.
You can make smart investment choices if you comprehend the fundamentals of supply and demand, which underpin bitcoin value and the forces that affect it. If you think that demand will rise for reasons X, Y, and Z and that supply will not keep up, then buying bitcoin might be a smart investment.
