Patience is a key factor in the cryptocurrency market due to the volatility of available assets. This means that we must base our orders on a deep technical analysis and a solid volume indicator since in other cases the price can be lateralized and we will lose our strategic entry. Liquidity in all markets peaks for a certain hour and so we will analyze what is the best time of the day to trade cryptocurrencies.
Cryptocurrencies are the most difficult digital assets to trade on a daily basis because unlike conventional currencies, there are no “days” in the cryptocurrency market. The bitcoin market is open all day, every day, and this presents an interesting opportunity to observe how price trends vary over the course of a typical day.
Are early mornings the best time of the day to trade cryptocurrencies?
Studies have been conducted on prior occasions to Coinbase’s Bitcoin charts, in order to analyze price fluctuations and determine what is exactly the best time of the day to trade cryptocurrencies.
It turns out that at midnight and 1 a.m. (UTC) has been the hour with the most trade volume for the bitcoin price. Particularly at 1 a.m. It has higher daily and lower daily bitcoin price than any other time of the day. This suggests that the bitcoin price has usually seen its most abrupt movements during this hour.
The reason behind this phenomenon may be that at this time it marks the beginning of the afternoon in the United States and the working hours begin in Asia, where many cryptocurrencies move. This is one of the times of the day when Westerners and Asians are most likely to be active simultaneously, “inflating” the market in this way. Asian traders may just be waking up and reacting to the news of the day, and American traders are still awake to react to the reactions of Asian markets.
It has been shown that, unlike the Forex market, there is not a “best” specific time of day to trade cryptocurrencies. Since 2016 we can say that a trader would have been slightly more likely to trade during a daily minimum than during a daily maximum when placing orders in the morning, starting at 3 am, but still, the differences are small enough to it is foolish to extrapolate them as a meaningful measure for any trading day.
Analyzing all these factors we can conclude that the best way to invest in Bitcoin is in the long term unless you have excellent analytical skills on the crypto market and you can take advantage of bull and bearish movements at your convenience. Whoever invested in BTC in early 2017 and sold in December of that year, will have multiplied their capital several times without rough days of chart analyzing.
Crypto news is essential
If you are trying to decipher the best time of the day to trade cryptocurrencies you should consider the news relevant to the crypto market. Sometimes the community will witness positive news that encourages crypto adoption cases and sometimes we will see news like that of Warren Buffet calling Bitcoin “Rat poison”. This news can give a drastic turn to the market and mark new beginnings of trends.
Because the FOMO exists and can cause people to buy too many tokens, important enough news will open new possible market entries regardless of time, although it never hurts to follow your favourite crypto newspapers to always be aware of what is happening.
It should be noted to expect what trend the market adopts after news and not try to decide for yourself since you will never know if news will lead directly to a massive buy or sell orders.
