If you trade crypto, weekends can have a large impact on your portfolio and profits. In the crypto world, weekends are simply another day of trading. There is no downtime between opening the markets in Europe and closing them down again in America, although this has been rumoured to happen in some cases. CryptoWeekend has gotten its own name because of how it can affect the markets on the weekend. CryptoWeekend comes in two forms, based on whether you are a day trader or a long-term trader. Barring financial disasters and missing the deadline for selling your coins, you still have to wait until Sunday arrives before you can make any trades with your portfolio. The first form of CryptoWeekend is when the market opens and closes within one day. This is common with American traders as well as European traders in some cases.
A typical crypto trader will set his or her orders at the beginning of a trading day and hope for the best. They will watch the charts closely to see how their assets are doing, and if there is a sudden dip in value, they will probably sell off their coins before it is too late. You can buy back into the market afterwards, and depending on which coins you choose, your portfolio might have increased in value or not. You could have lost money on a day trade but still, be up on your overall portfolio.
The “Sunday Effect” In The Crypto Market:
The Sunday Effect is the second type of CryptoWeekend. It refers to the close of trading and opening up for trading again on Monday. Some people believe that there is a “Sunday Effect” when it comes to cryptocurrency markets. This occurs when you check your portfolio and find that it has dropped significantly, so you sell everything off in order to ensure that you do not lose any more money. The markets have a tendency to go down, particularly on Sunday evenings, and unless you are good at holding onto your assets, you will probably lose money.
When it comes to the “Sunday Effect”, economists think that traders know they do not have to pay any taxes until Monday morning. It is human nature that if you do not have to pay income tax right away, you usually spend more freely because you know that the money is in your bank account.
A brief history of bitcoin prices and weekend price swings:
In 2017, Bitcoin price always saw a 15% average decrease on Sunday night. During the past two years, it went down about 10%. But during the last 7 months of 2018, there were 5 cases when Bitcoin had no effect on Sunday. January and February brought almost no changes. On January 23, Bitcoin was worth about $11,800, and on February 1, it was at about $15,000. It hovered around the $ 15,000 mark for 4 days straight before starting to drop at the end of the month. In November 2018, Bitcoin prices were down by about 15%, with most of it happening on Friday night. Saturday brought little to no effect until Sunday, when Bitcoin was roughly around $9k again. On the weekend for Bitcoin, it was about $20,000-$40k.
What are the factors that cause the crypto market to crash on weekends?
- Trading on Margin:
Margin trading refers to borrowing money to buy coins and then selling them at a later date at a profit. Margin trading is an easy way to make money, but it is very risky as well. Most financial institutions frown upon margin trading because it can lead to the loss of your initial investment and potentially cause your account to be shut down. At times, you can use margin trading to buy coins at cost price and sell them off for a profit. Have you been looking for a place where your skills can earn through bitcoin margin trading? If so, then bitcoin prime is it!
- News and Events:
With news usually comes panic and a sell-off. In some cases, the news is geared towards the market being bullish one day and bearish the next. Because of this, we usually see two different price points for cryptocurrencies every week.
- Less market manipulation on weekends:
The biggest factor that leads to a drop in the crypto market is market manipulation. With less traders and investors, the field is open for large players to move the prices. Even if they do not flourish on weekends, it is very likely that there will be at least some price swings every weekend.
- Crypto ETFs:
Most major financial companies are interested in cryptocurrencies. Because of this, many of them are sponsoring ETFs that come from an exchange that does not even have a physical location. What this means is that these ETFs will have a direct representation of the prices of cryptocurrencies and throughout the market. This could cause big price changes overnight because these ETFs are usually priced to move the markets and be sold off for profit.
CryptoWeekend can affect the crypto market greatly. Because there is always a dip in the market, it is important that you are as prepared as possible and with a plan that can help you avoid losses. When it comes to coins, these same markets will change, so it is always important to check out all the coins available for trading in order to see which ones are the most profitable.