Correct entry and exit: Good timing required: At what times Bitcoin and crypto should be purchased | news

Crypto-trading characterized by high volatility and extreme price fluctuations
Trading is increasingly based on opening hours on Wall Street
Avoid weekend shopping

Cryptocurrencies are known for the high volatility that comes with trading them. The reasons for price declines or increases are often difficult to predict, as a single tweet from Tesla CEO Elon Musk was previously enough to trigger double-digit price fluctuations (in both directions) for Bitcoin & Co. In addition, price movements in digital currencies are often more extreme than in the stock market. Double-digit losses or gains in the short term are not uncommon, making it even harder to recognize when the right time to buy or sell cryptocurrencies has come. Nevertheless, the statistics give some clues as to what rough benchmarks a trader can follow to get the best possible time for crypto trading.

advertising

Cryptocurrencies have corrected sharply over the past few weeks. Speculative investors can now trade CFDs on the world’s most popular cryptocurrencies with leverage and availability 24/7 with Plus500.

turn on

Plus500: Please note the information5 to this ad.

Like a weekly forex trader, it is also important for a crypto trader to find the time when liquidity and market trading volume are as high as possible. While liquidity is a minor concern for those who only want to invest small amounts in cryptocurrencies, the exchange portal CoinDesk recommends using more established crypto platforms, as these apps are more protected against manipulation or the effects of large buy or sell orders.

Switch from Asia to USA

But when exactly is it most traded in the markets? In the past, the crypto market has been particularly oriented towards the Asian markets. The reason for this was that Bitcoin & Co. was mined in particularly Asian countries, and trade in cyber currencies also gained momentum here much earlier. As Quantum Economics CEO Mati Greenspan comments to CoinDesk: “During the 2017 rally, the sunrise in Japan was a big thing for the bitcoin price.” The Chinese New Year has also previously been feared by cryptocurrencies, according to DerStandard, there have been price losses for years because monetary gifts are often given at the festivities, which is why investors are increasingly disposing of their crypto investments.

However, this trend has since disappeared. The background is the relocation of the crypto market from Asia to the United States. China in particular is now taking cryptocurrencies hard on the court: Sharpening and trading in cyber currencies is now banned there. On the other hand, Western institutions have now opened up to Bitcoin & Co. Cryptocurrencies are now seen as a lucrative, albeit high-risk investment, and sometimes find their way into the portfolios of large investment banks.

This can also be seen from the turnover of cryptocurrencies. According to DerStandard, this rises reliably at the start of Wall Street trading and peaks between 15.30 and 16.00 Central European time. On the other hand, trading volume at the close of US markets (22.00 CET) is declining rapidly. As Coin Metrics tells CoinDesk, this correlation was strongest in the first quarter of 2022. If you want to trade Bitcoin, you should definitely keep these times in mind.

Better no trade on the weekend

Unlike the stock exchanges, crypto trading does not rest even on the weekends. Nevertheless, crypto trader and market analyst Cantering Clark advises CoinDesk not to trade Bitcoin & Co. in the weekend. Lower trading volumes would thus make the crypto market more vulnerable to manipulation: “Weekends in old markets such as forex have always been thinner. Knowing this, banks are pushing the market around to force movements. The same can be seen in crypto, which is why it takes so long “has been like that, the perception is that any weekend activity is wrong and not sustainable. Never trust that the weekend is something to keep in mind”.

DerStandard also used BitcoinMonthlyReturn data to determine that since 2010, the Bitcoin price was mostly weak in September and March, while according to statistics, it was more likely to post gains in April, May, October and November. Nevertheless, such statistics are not reliable indicators of future profits, especially since the original cyber currency is still quite young, ie. the data situation is still quite manageable.

Strong fluctuations in gas taxes

Finally, trading in DeFi currencies such as Ethereum should be discussed. Here, so-called gas fees are imposed on transactions, which fluctuate greatly depending on how hard the network is currently being used. Anyone who trades only small amounts but completes a transaction at an inappropriate time can very quickly face fees that even exceed the amount traded. That is why it is all the more important to get a good entry and exit point here. Here, too, it is worth taking a look at the statistics. As Flipside data researcher Connor Higgins explains to CoinDesk: “If we break the charges down to the hour, we see fewer but larger transactions around midnight ET [Eastern Time, 5 Uhr morgens MEZ, Anmerk. d. Red.]and more activity around 5:00 PM ET [22 Uhr MEZ, Anmerk. d. Red.]which has long been the most expensive time to shop. ”

However, this has now moved to the point that more market participants would try to take advantage of the less active times to trade, which in turn would result in rising fees in what were perceived as more favorable times. But according to the data analysis company Nansen, it could also be stated here that the trading volume on the two largest crypto exchanges, Coinbase and Binance, would increase during the opening hours of the American stock exchanges.

Editing finanzen.net

Image Sources: Stanislav Duben / Shutterstock.com, Wit Olszewski / Shutterstock.com

Leave a Comment