Crypto trading markets operate 24 hours a day, seven days a week. Unlike the stock market, there are no restrictions on opening or closing positions at specific times or dates. Still, factors like liquidity, the trading platform you use, the difference in time zones, and increased trading during a specific period can influence trading hours.
In this article, we’ll be reading about crypto trading hours and the factors that influence these hours, affecting trade outcomes.
Understanding Crypto Trading Hours
Most crypto trading is conducted through exchanges, which are platforms that connect traders and investors to conduct their crypto trades. Although traders can buy or sell crypto at any given time, having the required liquidity to execute the trades is crucial.
Crypto Trading Fees
Although you can buy or sell crypto anytime, the time you trade changes the applicable trading fees. For example, selling or buying during busy hours of crypto trading (8 pm to 4 pm local time) can lead you to pay a higher fee, whereas, during the off-time, you won’t be paying a hefty fee.
When the market is busy, you can expect increased liquidity.
Crypto Trading Hours vs. Stock Market Trading Hours
The stock market runs five days a week, from 9 am until 4 pm ET, with weekends off. Crypto markets are always open. However, it does not mean any time for crypto trading is feasible. Depending on the market trends, specific times and days are better to trade than others.
Advantages and Disadvantages of 24/7 Crypto Trading
Let’s look at the advantages and disadvantages of 24/7 crypto trading:
Advantages
- It’s always convenient for traders and investors to carry out trades when they seem feasible.
- The trader has access to the market at any given time.
- The returns are higher due to a bigger market.
Disadvantages
- Access can sometimes be limited when using certain exchanges and crypto trading platforms.
- Although trading can occur around the clock, the risk can increase on certain days or at specific times.
- The market hours are not regulated, so traders can miss out on market trends or essential movements.
Impact of Financial Institutions on Trading Hours
The non-stop trading hours of the crypto market impact financial institutions like banks and exchanges. Conventionally, the stock market closes daily and on weekends, enabling investors and financial institutions to reposition their assets.
Conversely, the crypto market operates without a break, but there’s a stretch period within the 24-hour time frame when banks and exchanges are closed. At that time, the money isn’t being moved as effectively as it does during business hours.
This stretch period can cause lag and a delay in making successful trades. For example, if a trader wants to deposit money into their crypto account on a Sunday night to execute a trade, the funds will reach the account on the next business day.
Until then, the trader will have to wait to complete a transaction. There’s a massive mismatch between the timings financial institutions operate and the around-the-clock nature of crypto markets.
Trading Crypto on Weekends
Although crypto markets operate on weekends, the market’s volatility increases during the weekends for several reasons mentioned below.
Margin Trading
The term refers to crypto trades executed by the trader using borrowed money. When the price of a crypto asset falls, it can trigger a margin call where margin traders have to repay the borrowed funds.
This scenario can force a trader to move their funds around. However, as the banks are closed on weekends, it creates further issues and causes the crypto values to fall more.
Low Trade Volume
Despite the open market, most crypto traders and investors take weekends off, decreasing the trade volume. When the trade volume is low, executed trades have a more substantial effect on the market than on weekdays when the trade volume is high.
Delayed Transactions
On weekends, when banks and other financial institutions are closed, traders face more trouble sending money into the exchange accounts. This delayed transaction time can limit the market liquidity, making trades more difficult.
Is There a Specific Time To Buy Crypto?
According to statistics, the best days to execute trades are weekdays, and the best time is when the market is the busiest, around 12 pm ET. Nevertheless, it doesn’t mean trading during this time or days will only guarantee fruitful outcomes.
Many vetted traders suggest trading crypto early morning before the New York Stock Exchange opens. However, it’s always possible to review the price fluctuations and market trends of different cryptocurrencies throughout the day to make an informed decision.
What’s the Best Time of the Month To Trade Crypto?
Monthly trading patterns and market fluctuations can reveal insights into the best time of the month to purchase crypto. On average, crypto prices tend to increase, starting from the first few weeks before showing a downward trend at the end of the month.
Therefore, investing at the end of the month is feasible. Still, it’s worth understanding that cryptocurrencies are highly volatile. The monthly trends you might review each month can completely change in the next month.
Common Mistakes To Avoid
While being patient and studying the market and trends is necessary before trading crypto, there are several things that novice traders do that lead to poor outcomes. Here’s a quick list of some common mistakes.
- Purchasing an asset when prices are low will not always result in a profit. Most crypto assets with a falling user rate might eventually vanish from the market due to an insignificant reach and value.
- Making big purchases is another common mistake that can make crypto traders lose their finances. A five to ten percent investing capital is advisable for crypto investments and trading.
- Most beginner traders consider crypto trading a fast and easy way to make money.
Besides making these mistakes, beginner crypto traders can become victims of rising crypto scams, including cloud multiplier scams, where the scammers contact the victim via email or phone, providing them with a fake crypto investment opportunity. These scammers will ask for a crypto transfer to a digital wallet.
Another popular scam is called pump and dump, where a group of shady crypto investors or scammers inflate or deflate the price of a particular currency, increasing its value and demand for a short period.
After building the hype, scammers wait for the price to reach its peak and then sell all their coins, causing a massive drop in the price. There are also malicious crypto wallet software and even fake coins you need to watch out for.
In a nutshell, researching cryptocurrency and studying trends is necessary to achieve better results.
Conclusion
While there are no specific trading hours for cryptocurrency trading, you’ll need to time your crypto trades to achieve better outcomes. Please remember that the trading hours for different cryptocurrencies change depending on what type of strategy you are following.
Reviewing the price charts and historical data and noting the best times for trading will give you an idea of how and when to make a profitable investment.
