Have you noticed that the cryptocurrency market usually dips during the Weekend and gradually spikes during the Weekday? The dip occurs quite often despite the crypto market being active 24/7.
Genesis Volatility released a chart recently showcasing less volatility during the weekends. The price of many cryptos trades on a razor-thin margin giving no option for investors to trade with decent profits.
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So Why Does Bitcoin & Cryptos Dip During the Weekend?
While cryptos don’t rest during the weekends, the US equity market does, and so do the stock markets around the world. In simple words, smart and large institutional money experiences a pause during the weekends making the trading volume dip. Therefore, cryptos hardly show any volatility during the weekends and eventually end up trading in red on Saturdays and Sundays.
In addition, day-traders stay away from their bets during the weekends since there’s no volatility. A good swing on both sides is a day-trader’s best friend, as it gives ample room to decide ‘when to buy and when to sell’. However, the same amount of volatility goes missing during the weekends and keeps even day-traders out of the market.
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Cantering Clark, a pseudonymous crypto trader, and market analyst revealed that the crypto market sees a pause in big money during the weekend. “Simply put, the weekends have a drop-off in participation by smarter money. The market is less compelling to trade,” he said to CoinDesk.
Not just cryptos, Clark explained that even the Forex market gets “thinner” during the weekend. “Weekends in legacy markets such as forex were always known to be thinner,” he said.
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Knowing this, banks would push the market around to force movements. The same thing can be seen in crypto, so for the longest time the idea was that any weekend activity was ‘wrong’ and worth fading,” Clark said.
He also suggested that trading in Bitcoin and cryptos during the weekend is a bad idea. He urged investors to stay away from the market during the weekend as there are high possibilities of it going down. “‘Never trust the weekend’ is a good thing to remind yourself,” not to trade during that period, Clark summed it up.