The Best Times To Trade Cryptocurrency

Unlike traditional markets, the cryptocurrency market is open 24/7, 365 days a year, even during public holidays. This means that investors can buy, sell, or trade crypto at any time. However, there are certain days and times that are more advantageous for trading. For example, the market is generally more liquid during business hours on weekdays, but transaction fees may also be higher during those times. Additionally, the lack of regulated market hours means that traders could miss big market movements.

Cryptocurrency markets are open 24/7, 365 days a year

Unlike traditional markets, cryptocurrency markets are open 24 hours a day, 7 days a week, 365 days a year. This is because, unlike stocks and commodities, the crypto market is not a regulated exchange but is spread across a decentralised network of computers. There is no overarching authority when it comes to crypto market hours, but rather a number of unaffiliated cryptocurrency exchanges all operating independently from each other (e.g. Coinbase, Binance, and Poloniex).

The 24/7 nature of the cryptocurrency market means that investors and traders can always execute crypto transactions. However, it is worth noting that there may be times that are more advantageous for trading. While the crypto market is always open, there are varying levels of trading activity, and a lot of trading happens within just a few hours. Cryptocurrencies are most commonly traded between 8 am and 4 pm in local time. Your trades are more likely to be executed when there is the highest level of activity.

The best times and days to trade crypto depend on individual investors' preferences and strategies. Generally, the crypto market is more liquid during business hours on weekdays. However, transaction fees may be higher during those times as well. On the other hand, fees may be lower during slower times of the day, like the middle of the night. It is also worth noting that crypto values often crash during the weekends due to lower trading volume and the challenges of margin trading and accessing funds with banks being closed.

The daily close of a cryptocurrency is important for traders and enthusiasts

Unlike traditional financial markets, the cryptocurrency market is open 24 hours a day, 365 days a year. This means that traders and investors can buy and sell cryptocurrencies at any time. However, this can make it difficult to determine the price point at which a cryptocurrency closed on a given day.

To address this issue, the cryptocurrency community has adopted the concept of a "daily close". The daily close occurs at the end of a full day of trading (12:00 UTC) and involves comparing the price of a cryptocurrency to its price exactly 24 hours earlier. This allows traders and enthusiasts to assess the performance of a cryptocurrency over the past day and stay up-to-date with market trends.

The daily close is important because it provides a snapshot of how a cryptocurrency is performing. By comparing the daily close to the previous day's price, traders can make more informed decisions about their investments. Additionally, the daily close can help identify macro trends and make predictions about future asset performance.

While the majority of cryptocurrency trading occurs during global market hours, there is still a significant amount of activity on weekends. However, it is worth noting that weekend trading may be influenced by algorithmic trading bots and market makers, and it may not accurately reflect the sentiment of smarter money. Therefore, it is generally recommended to be cautious about trading decisions based solely on weekend activity.

The best time to trade is generally when it suits you

Unlike traditional markets, the cryptocurrency market runs 24/7, 365 days a year, even on public holidays and weekends. This means that you can trade crypto anytime, anywhere. However, there are certain days and times that are generally more favourable to crypto traders.

It is worth noting that the trends are likely to change over time, and past performance is not a guarantee of future outcomes. The crypto market is highly volatile, and even more so on the weekends, when there is less trading volume. Therefore, it is important to do your own research and remember that prices can go down as well as up.

Additionally, the time you choose to trade can impact the fees you pay. During busy hours, you may end up paying higher transaction fees ("Ethereum gas fees"), while the fees may be lower during slower times, like the middle of the night.

The crypto market is busiest around 12 pm ET

However, there are still some optimal times to trade crypto. While the market never closes, there are times when it is more liquid and active. Typically, the crypto market sees higher trading volume during business hours on weekdays. This is because there are more participants and more "action" in the market. As a result, there is also greater liquidity, which can be advantageous for traders as it provides more opportunities to enter or exit trades.

The busiest time in the crypto market, around 12 pm ET, also coincides with the typical close of business and early evening. This is when trading activity tends to ramp up and peak. This timing may be influenced by the U.S. trading hours, as there is data to suggest that crypto investment has largely shifted from the East to the West. As such, crypto trading activity often aligns with traditional market hours in the U.S., with bitcoin spot volume tending to peak during U.S. stock market hours, especially at the opening bell.

It is worth noting that while the crypto market is accessible at all times, the lack of regulated market hours means that traders could potentially miss out on significant market movements. Additionally, trading during busy hours may result in higher transaction fees due to network congestion.

The time you trade can impact applicable fees

The time you trade cryptocurrency can impact applicable fees. Cryptocurrency markets are open 24/7, even on public holidays, and fees can change dramatically from one hour to the next. Therefore, the time of day you choose to trade can have a significant impact on the fees you pay.

For example, blockchain transaction fees, such as Ethereum gas fees, are responsive to network congestion. So, if you trade during a busy time, you may end up paying much higher fees. In fact, someone looking to trade $100 worth of cryptocurrency may end up paying twice that amount in gas fees if they trade at a busy time.

Data from April 2022 shows that there were fewer but larger transactions around midnight ET, and more activity around 5 p.m. ET, which used to be the most expensive time to transact. However, as people started to avoid trading during the busiest hours of the day, the less active hours became more active and therefore more expensive.

As of October 2022, there is still a dip in transactions and gas fees on weekends, and the most expensive time to trade is when the U.S. markets open. So, if you're looking to save on fees and your trade isn't time-sensitive, it's best to wait until outside of U.S. trading hours.

In addition to blockchain transaction fees, there are also exchange fees to consider. These include maker and taker fees, with makers often paying less for adding liquidity through limit orders. Exchanges may also offer discounts for using their native tokens, and fees can be volume-based, decreasing with more trading activity.

Deposit fees are less common than withdrawal fees, which can vary widely across exchanges. For example, Coinbase has fees that can reach up to 25 USD, while Binance charges a flat fee.

Overall, the time you choose to trade cryptocurrency can have a significant impact on the fees you pay. By choosing the right time to trade, you can minimise fees and maximise your returns.

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