Best Time to Trade Crypto
The cryptocurrency market is a 24–7 industry, there are always trade opportunities available. However, that does not mean that every second of the day is optimal for making money. Based on trading hours, the patterns of liquidity, volatility and global trading session influence traders can ascertain when to trade in the market. In this comprehensive guide, I will share with you on when the best times to trade crypto is using fresh research and data.
Primary drivers: liquidity and volatility
Liquidity: The ease of how quickly assets can be bought or sold without causing a big change in the price. Especially important to traders during times of increased trading. This is predominantly due to the asset contributing to high liquidity and thus, the ease for smooth trades thereby reducing a slippage factor. Liquidity is greatest during periods of overlap between the major trading sessions: New York, London, and Tokyo.
Price Wildcards: Since cryptocurrency markets are volatile in nature, they provide a lot of prospects for traders but the downside is that it obviously comes at risk to an extent. The highest volatility is usually during a key news release or during the overlap of the different major time zones. That kind of movement presents new opportunities for the savvy trader, but also daunting risks resulting in a turbulent first month.
What time of the day is best to trade cryptocurrency?
U.S. Market Hours (9:30 AM – 4:00 PM EST): When it comes to the breadbasket of financial markets, the U.S. takes the lead and trading in crypto is no different. The U.S. trading hours, in general, are the most volatile between 9:30 AM to 10:00 AM EST and from 3:00 PM to 4:00 PM EST. Cheers, This is when traders are jumping in and out positions based on stock market behaviors hence a very volatile price-points.
When US and european market hours overlap from 12:00 PM to 4:00 UK time. This is when liquidity is the highest, which facilitates much faster trade execution with very little slippage. According to figures generated by StockApps, the two markets converge on almost 60% of today’s total trading volume for Bitcoin, and even back in September they have already driven a large majority of this cryptocurrency’s daily trading as well.
Late Night Trading (Asian Markets): In the evenings back home, Japan, China and South Korea dominate the night-time crypto trading activity, especially in that early 12:00 AM — 3:00 AM window of time. Surprisingly, with respect to its 52-week low, Bitcoin generally sees a volatility spike in that time frame as CoinDesk previously reported. This is an opportunity to take advantage of the market swings especially for traders outside Asia.
Weekly Trading Patterns
An analysis of the weekly trends inherent to cryptocurrency markets. Traders can use this cycle to time their entry and exit points more efficiently.
Monday Sell-off: The weekends cause more fear-mongering, and you see a lot of movement in the beginning of the week as traders react to news over the weekend. Monday is marked by major price swings when lots of retail traders close their positions and create sell-offs.
Stability from Tuesday to Thursday: Trading in the middle of the trading week, when major institutional investors are trading, can work in your favor. This period, especially Tuesday and Wednesday is the most liquid period without price shocks that bode well with longer-term strategies.
Friday Volatility: Friday may be a wild day because the traditional financial markets are starting to close for the weekend, and everyone is looking at charts trying to anticipate what things would like when they open on Monday.
Trading on the Weekend: The activity level slows down over the weekend because of non-participation by institutional investors. Liquidity is lower, however volatility can spike as markets are thinner. This is conducive to the sort of environment where traders can make money by accepting higher risk. There is often a lack of institutional activity in the weekend, and therefore retail traders can somewhat have more control over price movement leading to some interesting volatility.
Seasonal and Monthly Trends
Seasonal Patterns: Cryptocurrency is also influenced by seasons. Spring and fall pass the history test, with big gains during those months by historical data. Holiday low volume trading: Typically experienced during summer when traders go on vacation and the price move very slow.
Having a look at monthly patterns: Research shows that by and large, crypto prices move higher in the first half of the month before heading lower across the last couple days. This does not pertain across the board, but traders do use this to time their entries.
News and furthermore market events
The price of cryptocurrencies is also very much attached to real-world events, such as regulatory changes (which we have seen a lot over the course of 2019 with Facebook’s Libra debacle), exchange outages (the most famous being Mt. In 2023, Ethereum network upgrade moves marketiasm as traders react to deployed features.
Regulatory News, Regulatory events in say US or China suddenly with a high frequency hit the wires and can move prices instantaneously. A salient market event was the Binance exchange being in hot water in 2023, resulting in a large sell-off as traders tried to pull their assets off the platform.
Social Media and Celebrity: High profile individuals such as Elon Musk have proven to move markets with tweets. A single tweet from Musk about Dogecoin in 2021 led to the price spiking up by more than 20% in one day.
Charting: The Art Of Timing Trades
Simple Moving Averages (SMA) is one of the most widely used indicators to measure when it is good to trade. A 20-day SMA crossing above its 50-day SMA is a buy signal, which last happened in July 2020. Investors that trailed it were rewarded a by a 576% return for their troubles as of April 2021.
Volume-Weighted Average Price (VWAP): Provides an average price that a cryptographic money has exchanged for the day. That is a great tool for finding the trend and also for entry takes during high volatility periods.
In conclusion: Time Your Crypto Trades for Maximum Gains
The best time to trade cryptocurrency is when you have the most liquidity which mean during the overlap of U.S. and European sessions. Mid-Week trading is the most promising to trade in because it provides lower risk than usual and gives predictable price movements. On the other hand, weekends and after hours will provide the highest volatility but also come with higher risks.
Instead, in order to earn maximum profits, you should view news releases continuously, know the market cycles and time your 60 seconds trades during times of high liquidity and perfectthe right technical indicators for the task. No matter your trading style: Intraday day trader or multisession investor, this understanding of market structures in 2024 is key for you to taking decisions loaded with information and potential profits.
Strategically trading in and around these high-volume periods, keeping abreast of real-time news stories and utilising the right tools will leave you with a more assured understanding of the ever-moving crypto market.
