Many new investors in crypto assets, especially those who have traded stocks before, have questions about when the cryptocurrency market opens, if it closes at all, and on what days it is open.
Read below to learn more about crypto market opening hours and whether there will be any major changes to weekend and weekday trading.
Cryptocurrency Market Trading Hours
One of the main advantages of cryptocurrency trading over traditional securities is that the market is openly available. Unlike stocks, which have limited trading hours, crypto markets have no start or end times. It’s basically open 24 hours a day.
These opening hours apply to all days of the week. This means that investors have access to the cryptocurrency market 24 hours a day, with no weekend breaks. Additionally, cryptocurrency exchanges are open on public holidays, allowing active investors to trade at any time of the year.
The availability of cryptocurrency trading stands in stark contrast to most traditional financial markets around the world. In the United States, exchanges are open only on weekdays and trading is limited to Monday through Friday from 9:30 a.m. to 4:00 p.m. ET. While some stocks can be bought and sold during so-called “extended trading hours” (usually from 4 a.m. ET to 8 p.m. ET), those hours are still significantly more restricted than with cryptocurrencies.
The US stock market also has many holidays, and the New York Stock Exchange (NYSE) and NASDAQ are closed all day. For example, in 2023, Martin Luther King Jr. Day (January 16th), Presidents’ Day (February 20th), Good Friday (April 7th), Memorial Day (April 29th), The market is closed on 10 public holidays, including Sunday. Labor Day (September 4th). On some trading days, the market closes early, such as July 3rd and Black Friday (November 24th).
Unlike cryptocurrencies that operate 24/7, investors who submit orders outside of normal trading hours may not have their orders executed until the market opens, resulting in orders submitted after business hours on Friday. There may be some waiting time for transactions that occur. Even if the broker allows trading with longer trading hours, new investors are advised to refrain from trading as the trading volume will be significantly reduced. As a result, your order may be executed at an undesirable price.
How the Cryptocurrency Market Changes Throughout the Week
Although the cryptocurrency market operates 24 hours a day, the day of the week can have a significant impact on trading. Just as traditional markets experience reduced liquidity during after-hours trading, crypto markets also experience changes in weekend and holiday activity. Some experienced investors refer to this shift as the “Sunday effect.”
Weekends tend to see a sharp decline in trading activity, resulting in greater price fluctuations for crypto assets compared to normal trading hours on weekdays. Exchange liquidity decreases during this market downturn as the number of traders decreases and trading activity decreases.
Breaking news and other disruptions in the market can cause disproportionate price movements, which can be accidental or damaging to traders who take the plunge and place orders during this time.
Margin trading, in which investors borrow money from brokers to make large trades, also contributes to weekend price fluctuations. Due to the fall in prices, traders who want to sell their assets will have to repay the money they borrowed.
The impact of margin traders selling in response to a market with low liquidity and falling prices may lead to further declines. Some stock exchanges exacerbate the problem by charging higher margins on weekends, forcing margin traders to pile up more collateral on their investments.
By examining historical market data, a CNBC report claimed that Bitcoin’s biggest price fluctuations mainly occurred over weekends. BTC’s all-time high of $19,600 was recorded on a Saturday in December 2017, as were many of the crypto asset’s relative lows. Furthermore, the report found that 82% of trades over the weekend saw a price change of at least 3% in both directions for Bitcoin.
A similar report from Investopedia blames lower weekend trading volumes and a disproportionately large number of individual orders for the large price swings. According to the report, so-called “Bitcoin whales” become more active on weekends and have a significant impact on the price of crypto assets due to their low liquidity.
The report also attributed the price fluctuations to the mismatch between cryptocurrency trading and bank business hours, and BKCM founder and CEO Brian Kelly said that over the weekend, new He pointed out that there was a lack of funds.
Is there a βbestβ time to trade cryptocurrencies?
While there is no silver bullet for timing crypto markets, a CoinDesk report shows that there are changes in crypto trading at certain times and days of the week. It turns out that there is. The report claims that Asian markets had the biggest impact on prices ahead of the mass adoption of cryptocurrencies in 2021.
Bitcoin’s rise in 2017 was positively correlated with the start of Japan’s waking hours, as Japanese traders became more active. On the contrary, many investors are likely to become even more pessimistic in 2021 ahead of the Lunar New Year, fearing massive selling pressure from Chinese crypto miners.
Matty Greenspan, CEO and founder of investment advisory group Quantum Economics, believes that the mainstream adoption of cryptocurrencies, and more importantly Wall Street’s involvement, will have an impact on trading in Asian markets. He claims to have moved to the Western market. Bitcoin spot volume is now more closely correlated to US trading hours, and volume peaks show a similar correlation.
Among other warnings, the report advises investors to exercise caution when trading over the weekend. In addition to increased volatility, weekends also saw increased activity from algorithmic trading bots and market makers looking to take advantage of the absence of more professional investors, the report said. A similar legacy could occur in traditional foreign exchange markets, where reduced liquidity could lead to greater manipulation by large market participants, the report said.
The report noted that unlike trading Bitcoin or crypto assets, trading outside of traditional US market hours is a smarter strategy for trading DeFi tokens. This is primarily due to a drop in Ethereum’s gas fees (transaction costs), which typically peak around 5pm ET. Traders looking to save the most on gas fees should avoid peak activity on the Ethereum blockchain and instead stick to less traditional market hours to place DeFi orders.