The crypto market behaves differently at different times of the day depending on what time zones are more active. When the market is busy, whether internationally or locally, the market sentiment is different, and your ability to make a profit is impacted.
The crypto market is always open. You can trade crypto 24/7, which can be both a blessing and a curse.
Cryptocurrency is well-known as a volatile asset, making it very profitable, but you need to know how to harness its volatility to your advantage. One of the best ways to do so is to understand how the market operates during trading hours, both locally and internationally, and to keep an eye on market activity levels.
Crypto Market Operating Hours
The crypto market, all around the world, is always open and operating. You can trade 24 hours a day, 365 days a year. No matter where you are, you can get on an operating exchange where people are doing business buying and selling crypto.
The crypto market never closes because it is based on a decentralized network of computers rather than physical exchanges that work like a business would.
Stocks and commodities are traded on the New York Exchange or the London Exchange, and these exchanges are open for a certain number of hours daily. When the exchange is closed, trade cannot be made.
Crypto exchanges are based on a network of computers that help manage all aspects of the exchange, whether that is security, processing, load management, or any other feature.
Both centralized exchanges (CEX, such as Binance) and decentralized exchanges (DEX, such as Uniswap) are based on digital networks and are operational 24/7.
The only thing to remember is that certain crypto-related assets might be time-bound, and you might not be able to trade them 24/7 or as flexibly as you can trade actual tokens. Crypto CFDs are a great example of this.
Typically, trading crypto CFDs will happen during regular business hours (usually 9 am-5 pm), even on an exchange that is operational 24 hours a day.
Performance of the Crypto Market at Different Times
Just because the crypto market is available 24/7, it doesn’t necessarily mean you can trade whenever you like. Technically, you could trade whenever you feel comfortable, but you would limit your ability to earn the best profits possible.
The crypto market behaves differently at different times of the day, times of the week, and even times of the year. For traders, specifically day traders, the most important thing to consider is differences at different times of the day.
Typically, crypto exchanges have business hours similar to regular stock exchanges. No matter where you are in the world, the exchange you are working with will be busy during business hours in your vicinity. Usually, this is between 8 am and 5 pm.
However, if you are trading in a different territory, you must keep in mind the local time in that region. The busiest times of the day on the crypto exchange will be business hours in that region.
There are some differences between a crypto exchange and a stock exchange but also a lot of similarities. When the crypto exchange is busy, selling and buying assets is much easier.
However, it is also vastly more expensive than what it would cost at an odd time of the day. What you are looking for is that sweet spot where the cost of trading is right, and you can pull off trades that make you a profit!
Generally, it is recommended to trade when the market is active. This way, you might have to pay slightly higher fees but benefit from the market’s liquidity. During off-peak hours, you might save some money in transaction fees, but the exchange might not process your trade since there just aren’t enough buyers and sellers in the market.
Moreover, you are less likely to get a competitive price for your asset when the exchange is slow.
Trading on Weekends
Crypto exchanges function on the weekend and are also available on major holidays, but this might not be the best time for the average person to trade.
Changes in the crypto prices or the market itself over the weekend should be taken as a guiding light for changes to come in the following week. With the rise of bots and automated trading systems, it is very common for big changes in the market to be made due to these artificial ‘traders.’
In nearly all parts of the world, human traders are far less active on the weekends. However, some traders will deploy automatic trading software and bots to keep trading on their behalf and benefit from the slump in the market.
Others have more dangerous incentives and want to swarm the market with their artificial trading systems and create price movements that favor their position.
Overall, it is recommended that you take weekend prices with a grain of salt and double-check before pulling any trade. Remember that price changes on the weekend can revert over the following week, and real human traders resume their natural trends and bring the price back to what it should have been.
Best Time of Day To Trade
Performing trades will cost a fee because it strains the network and all the systems involved. Depending on the crypto you are trading, this could be a big or a small fee.
However, the bigger influencing factor is what time you trade since trading costs will fall or rise depending on how much activity is taking place on the network. In the past, the afternoon hours, particularly around 10 am to 2 pm, were the most expensive for traders since this was when there was the most traffic.
Traders with larger portfolios started carrying out higher-value trades at midnight, which previously used to be the cheapest to trade at. As a result, trading at midnight became pricey as the value of trades being performed was so high.
In most cases, the early morning or early evening hours are the cheapest to trade. The best option is to observe your local market and see what time will be most profitable for you regarding the cost of trades.
Conclusion
The fact that crypto markets don’t close has a few benefits for traders, but it also comes with unique challenges. One of the biggest differences is that the cost of trading crypto varies from time to time, so it is up to the trader to decide what price they are willing to pay to earn a profit.
While you can technically trade crypto at any time and day, it is best to follow the market and discover when the biggest price differences occur. This way, you can figure out when it will be most profitable for you to trade.
