When does the crypto market open? Does it close?

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Many new crypto-asset investors, especially those who have traded stocks before, wonder when the crypto market opens and if it even closes, and what days it operates.

Read on to learn more about the opening hours of the crypto markets and if there are any significant changes in trading between weekends and weekdays.

Crypto Market Trading Hours

One of the main advantages of trading crypto over traditional securities is the open availability of the market. Unlike stocks, which have limits on trading hours, crypto markets essentially don’t have opening or closing hours, they operate around the clock.

These hours are valid every day of the week, which means that the crypto markets are available to investors 24/7, with no weekend breaks. Additionally, crypto exchanges are open on public and national holidays, meaning active investors are free to trade any day of the year.

The availability of crypto trading stands in stark contrast to most traditional financial markets around the world. In the United States, the stock market is only open during the week, with limited trading Monday through Friday from 9:30 a.m. EST to 4:00 p.m. EST. While some stocks can be bought and sold during what’s known as extended trading hours, which typically run from 4:00 a.m. EST to 8:00 p.m. EST, the hours are still significantly limited compared to crypto. .

The US stock market is also closed on many holidays, with the New York Stock Exchange (NYSE) and Nasdaq closed for the entire trading day. In 2023, for example, the market will be closed for ten holidays, including Martin Luther King Day (January 16), Presidents Day (February 20), Good Friday (April 7), Memorial Day (May 29) and Labor Day (4 september). There are also a handful of trading days when markets close early, such as July 3 and Black Friday (November 24).

Unlike crypto, which operates 24/7, investors who submit an order outside of normal trading hours may not have their order filled until the market opens, which can mean days. wait times for transactions submitted after business hours on a Friday. Even when brokers allow extended trading hours, new investors are advised to refrain from trading due to the significant drop in volume, which may result in orders being filled at less desired prices.

How Crypto Markets Are Changing Throughout The Week

Although crypto markets can operate 24/7, the day of the week can have a significant impact on trading. Similar to the drop in liquidity for traditional after-hours trading markets, crypto markets experience a swing in activity on weekends and holidays. Some experienced investors refer to this change as the Sunday effect.

The sudden drop in trading activity, which tends to happen on weekends, leads to larger price swings for crypto-assets compared to regular trading hours during the week. Because there are fewer traders and less trading activity, liquidity on exchanges decreases during these market lulls.

Breaking news or other turmoil in the market may cause disproportionate price fluctuations, which may be unintended or harmful to traders placing orders during this time.

Margin trading, where investors borrow money from a brokerage to take advantage of larger trades, also contributes to weekend price fluctuation. Falling prices will prompt traders who are long to sell assets in order to repay what they have borrowed.

The influence of margin traders selling in conjunction with a low liquidity market and falling prices can lead to even deeper declines. Some brokerage exchanges further exacerbate the problem by requiring higher margins on weekends, thereby forcing margin traders to provide more collateral for their investments.

Studying historical market data, a report from CNBC claimed that the biggest Bitcoin price changes occurred primarily over the weekend. BTC’s previous all-time high price of $19,600 in December 2017 occurred on a Saturday, along with many crypto-asset relative lows. Furthermore, the report revealed that 82% of trading weekends saw a minimum price movement of 3% in either direction for Bitcoin.

A similar report from Investopedia blamed lower trading volume and disproportionate individual orders over the weekend for the outsized price swings. According to the report, the so-called Bitcoin whales are more active on weekends and have a greater influence on the price of cryptoassets due to less liquidity.

The report also attributed the price swing to the mismatch between crypto trading and bank opening hours, with BKCM founder and CEO Brian Kelly noting that there is a lack of fresh money coming in. the weekend to support prices.

Is there a best time to trade crypto?

While there is no magic formula for timing the crypto markets, a CoinDesk report noted that there are shifts in crypto trading at certain times and days of the week. The report claims that prior to the massive adoption of crypto in 2021, Asian markets wielded the greatest influence on prices.

Bitcoin’s rally in 2017 was positively correlated with the onset of waking hours in Japan, when traders there became more active. Conversely, many investors through 2021 would turn more bearish as the Chinese New Year approaches, fearing massive selling pressure from Chinese crypto miners.

Mati Greenspan, CEO and founder of investment advisory group Quantum Economics, says widespread crypto adoption and, more importantly, Wall Street involvement has shifted trading impact from Asian markets to Western markets. Bitcoin spot volume is now more closely tied to US stock market hours, with peaks in volume having a similar correlation.

Similar to other warnings, the report advises investors to beware of weekend trading. In addition to the increase in volatility, the report claims there is an increase in the activity of algorithmic trading robots and market makers on the weekends, who seek to take advantage of the absence of investors. more professional. According to the report, a similar legacy occurred in traditional Forex markets, when declining liquidity would lead to greater manipulation by large market players.

Unlike Bitcoin and crypto-asset trading, the report found trading outside of traditional US market hours to be a smarter strategy for trading DeFi tokens. Much of this has been attributed to lower Ethereum gas fees (transaction costs), which typically peak around 5:00 PM EST. Traders looking to save the most on gas fees should avoid spikes in activity on the Ethereums blockchain and stick to less conventional market times for placing DeFi orders.

Source of images

Featured image via Unsplash.

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