Why Does the Crypto Market Move More on Weekends?

Source: https://coinmarketcap.com/charts/

Having followed Bitcoin for some time now, I have always wondered why the market is most prone to volatility during weekends. Although I am not a trader, one thing I have always enjoyed about traditional financial market securities like stocks and bonds is that I could shut down on Fridays and not necessarily worry about positions during the weekend to spend the time with family and recharge. I thought I would look at the market capitalization chart over the last 3 months to see what stands out.

As I looked, I could see that about half the time, the market does move quite a bit relative to the previous week during weekends. One of the correlations I also see is that volume normally less during the weekends relative to the prior week. To confirm, I downloaded price feeds for Bitcoin during the same period and noticed the same pattern in which volumes during the weekend are less than the previous week’s average. I think we can expect this as the Cryptocurrency market continues to be driven by the demand of mostly retail, smaller investors which tend to take weekends off.

However, from experience in a brief stint I did as a Forex trader, low volumes during weekends and holidays of major markets provide traders opportunity to control price action more than usual volumes. Traders would seek to take these opportunities to push prices past psychological prices like whole numbers or key technical prices like moving averages to trigger stops for further price acceleration. This may certainly be what we are seeing in Crypto markets as they continue to attract traders seeking to take advantage of relatively illiquid markets that could be highly inefficient and volatile.

Therefore, if you like to trade these markets be aware of these potential moves as you hold positions into the weekends. If you are long term investor, continue to enjoy your time off and family!

Any thoughts?

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