Experienced traders can exploit the cryptocurrency market’s high degree of volatility to their advantage; however, inexperienced traders could quickly succumb to it and lose out as a result. In this post we’ll look at key factors influencing when and how best to trade cryptocurrency – increasing ROI along the way!
Crypto Trades 24/7 But Trading Activity Varies
Markets never sleep.
Markets Never Sleep. A Crypto Trade Is Available Round the Clock But Trading Activity May Vary Depending on Timezone Difference.
Crypto assets can be traded round-the-clock on cryptocurrency markets compared to conventional markets which close for holidays or festivals.
Though the cryptocurrency market never closes down or takes a rest, trading activity fluctuates significantly. With over 10,000 digital currencies and tokens currently available on the market and several hundred crypto exchanges available to trader, trading activities vary based on time of day and currency type available to purchase or trade on them.
There are a variety of factors that influence cryptocurrency trading activity and its growth or decline.
Banks and traditional financial institutions close on weekends and public holidays, which may reduce trading activities over these times and influence market prices. Liquidity is key when considering cryptocurrency market transactions.
When Is The Best Time To Trade Crypto Assets?
Crypto markets present both opportunities and challenges to traders, with its unstoppable nature providing both advantages and challenges. Knowing when is best time for trading has an edge over random trading patterns.
When is the optimal time to trade? That depends on a number of factors, including market cycles, type of exchange used (decentralized or centralized), and what type of trading is conducted (spot, futures or options trading – each type has unique behaviors).
Remembering to pay the transaction fees on decentralized exchanges is essential, as doing so could have a profound impact on profits if trading on blockchains with high fees – Ethereum is notorious for experiencing increased transaction volumes during bull markets, leading to higher transaction fees.
Liquidity of crypto assets is also an essential consideration when trading. Liquidity refers to how easily an asset can be exchanged for another or cash without incurring significant value loss.
Volatility increases with decreased trades. That means prices of cryptoassets move more swiftly and far reachingly, which will wreak havoc for traders while hindering large trades.
Amin Shams, an assistant professor of finance at Ohio State University in Columbus has cautioned traders to anticipate increased volatility this weekend. Trade volumes tend to decline on weekends historically.
What Is The Best Time Of The Day To Buy Crypto?
An analysis of cryptocurrency historical prices often reveals patterns of price fluctuation on certain days, providing you with useful insight. You can identify periods when crypto has fallen or increased and use that knowledge to make decisions; however, you must take into account external influences which might alter its price on that specific day.
As per a Fool.com study conducted from October to November of 2021, the optimal time to purchase cryptocurrency was early morning; however, bear markets, which at that point represented extreme bull markets at that point, can alter these times accordingly.
What Is The Best Time Of The Week To Buy Crypto?
As with any purchase decision, there is an optimal moment and time of day to purchase cryptocurrency. Weekends have often proven misleading as traders abandon trading due to reduced trading volumes; instead, midweek brings greater volatility with greater chances of profiting from it.
Bloomberg reports indicate that traders employed as professional traders generally prefer purchasing cryptocurrency during the week over weekends, when there may be more market makers and algorithmic trading bots present, as compared with fewer traders involved with market making or algorithmic trading bots, rendering markets less appealing on weekends.
Purchase cryptocurrency if you think prices will drop in the near future.
Fool.com data indicates that Thursday is an optimal day to invest in cryptocurrency, with six out of eight weeks seeing decreases on Thursday mornings indicating this might be an optimal opportunity.
What Is The Best Time Of The Month To Buy Crypto?
According to fool.com, the ideal time and place for cryptocurrency investment is at the end of every month.
An examination of past records reveals that prices tend to increase during the early part of each month before gradually decreasing at its end due to selling pressure and investors withdrawing profits from earlier investments.