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The opening and closing times of the cryptocurrency market, as well as the days it is open, are topics that many novice cryptoasset investors, especially those who have previously traded equities, have questions about.
Continue reading to learn more about the trading times for cryptocurrencies and whether there are any notable differences between weekends and weekdays.
Trading in cryptocurrencies has a number of benefits over traditional securities, one of which being the market’s open accessibility. Crypto markets don’t have opening or closing times; instead, they operate around-the-clock, in contrast to stock markets, which have trading hours that are restricted.
Because of this, investors have access to the cryptocurrency markets seven days a week, around-the-clock, without a weekend break. Additionally, cryptocurrency exchanges are open on statutory and public holidays, allowing active investors to conduct trades at any time of the year.
In sharp contrast to the majority of traditional financial markets worldwide, crypto trading is readily available. The stock market in the United States is only open during the week, with trading being permitted from 9:30 AM EST to 4:00 PM EST on Monday through Friday. Even while some stocks may be purchased and sold during “extended hours trading,” which normally lasts from 4:00 AM to 8:00 PM EST, the availability is still somewhat constrained in comparison to cryptocurrency.
The New York Stock Exchange (NYSE) and Nasdaq are both closed for business the full day on a significant portion of U.S. bank holidays. For instance, the market will be closed for 10 holidays in 2023, including President’s Day (February 20), Martin Luther King Jr. Day (January 16), Good Friday (April 7) Memorial Day (May 29), and Labor Day (September 4). Additionally, on a certain trading days, such as July 3 and Black Friday, the markets close early (November 24).
Investors who place orders outside of typical stock market hours could not have their orders honored until the market opens, which might entail waiting days for trades placed after hours on a Friday, in contrast to cryptocurrency, which is open 24/7. New investors are recommended to refrain from placing trades even when brokers permit trading during longer hours because of the large decline in activity, which may result in orders being filled at less desirable prices.
Although the cryptocurrency markets may be open around-the-clock, the day of the week can have a big influence on trade. On weekends and major holidays, activity in the crypto markets fluctuates, just like it does in after-hours trading on traditional exchanges. The “Sunday impact” is a term used by some seasoned investors to describe the shift.
Compared to typical trading hours throughout the week, the weekend’s abrupt decline in trading activity causes larger price fluctuations for cryptoassets. During these market lulls, there are fewer traders and less trading activity, which results in decreased exchange liquidity.
Disproportionate price fluctuations caused by breaking news or other market commotion can either be advantageous or disadvantageous for traders placing orders at that time.
Prices fluctuate more on weekends due to trading on margin, which is when investors borrow money from a brokerage to leverage larger bets. When prices decline, traders who are long on trades will need to sell assets to recoup their loan.
Even additional reductions may result from the impact of margin traders selling combined with a market with less liquidity and declining pricing. Margin traders are required to put up additional collateral for their investments on weekends by several brokerage exchanges, which further exacerbates the issue.
According to research done using historical market data, weekends have historically seen the biggest price swings for bitcoin. Saturdays also saw several of the cryptocurrency asset’s relative lows, including BTC’s prior all-time high of $19,600 in December 2017. The study also discovered that 82% of trading weekends had a minimum 3% change in Bitcoin’s price, either upwards or downwards.
In a related research, Investopedia attributed the disproportionately large individual orders placed on weekends and the reduced trading volume to the extreme price fluctuations. The article claims that because there is less liquidity on the weekends, so-called “Bitcoin whales” are more active and have a bigger impact on the price of the cryptoasset.
According to the study, the discrepancy between crypto trading and banking hours is to blame for price fluctuations. BKCM founder and CEO Brian Kelly said that there isn’t enough fresh money flowing in on the weekends to keep prices stable.
There is no foolproof method for timing the cryptocurrency markets, but a CoinDesk analysis observed that there are fluctuations in trade at particular times and days of the week. The paper asserts that Asian markets had the most influence on price until cryptocurrencies saw widespread acceptance in 2021.
The upward trend in bitcoin prices in 2017 coincided with the start of Japan’s waking hours, when traders there became more active. Contrarily, up until 2021, many investors would grow more pessimistic in the weeks before the Chinese New Year out of concern for the intense selling pressure from Chinese cryptocurrency miners.
The CEO and creator of financial advice firm Quantum Economics, Mati Greenspan, contends that Wall Street’s involvement in the mainstream acceptance of cryptocurrency has transferred the trading influence from Asian to Western markets. The hours of the U.S. stock market are increasingly more closely correlated with bitcoin spot volume, and volume peaks are no different.
The research cautions investors against trading on weekends, echoing past concerns. In addition to the rise in volatility, the paper asserts that market makers and algorithmic trading bots are becoming increasingly active on weekends in an effort to profit on the absence of more experienced investors. The research claims that a similar legacy existed in conventional Forex markets, where a decline in liquidity would prompt more market manipulation by major participants.
Contrary to trading Bitcoin and other cryptocurrencies, the analysis did discover that trading DeFi tokens outside of regular U.S. market hours was a wiser course of action. The decrease in Ethereum gas prices (transaction charges), which generally peak at approximately 5 PM EST, was largely to blame for this. The Ethereum network has peak activity, thus traders wishing to save the most on gas expenses should stick to less typical market hours for making DeFi orders.
