Good timing required: At what times Bitcoin and crypto should be bought

Crypto trading characterized by high volatility and extreme price swings
Trading is increasingly based on Wall Street trading hours
Avoid weekend trading

Cryptocurrencies are known for the high volatility that comes with trading them. The reasons for price falls or rallies are often difficult to predict, as in the past a single tweet from Tesla boss Elon Musk was enough to trigger double-digit price swings (in both directions) for Bitcoin & Co. In addition, price movements in digital currencies are often more extreme than in the stock market. Double-digit losses or gains in a short period of time are not uncommon, making it all the more difficult to recognize when the right time to buy or sell cryptocurrencies has come. Nevertheless, the statistics give some clues as to which rough benchmarks a trader can follow to get the best possible time for crypto trading.

Similar to a gemsehndler on the weekly market, it is also important for a crypto trader to find the time when the liquidity and the trading volume of the market are as high as possible. While liquidity is a lesser concern for those who only want to invest small amounts in cryptocurrencies, the exchange portal CoinDesk recommends using more established crypto platforms as these apps are more protected from manipulation or the effects of large buy or sell orders.

Shift from Asia towards the USA

But when exactly is the most traded on the markets? In the past, the crypto market has been particularly oriented towards the Asian markets. The reason for this was that Bitcoin & Co. was mined in particular in Asian countries and trading in cyber currencies also gained momentum here much earlier. As Quantum Economics CEO Mati Greenspan comments to CoinDesk, “During the 2017 rally, the sunrise in Japan was a big thing for bitcoin price.” The Chinese New Year has also been feared by crypto bulls in the past, according to DerStandard, there have been price losses for years because gifts of money are often made at the celebrations, which is why investors increasingly parted with their crypto investments.

However, this trend has since disappeared. The background is the relocation of the crypto market from Asia to the USA. China in particular is now taking cryptocurrencies to court harshly: the sharpening and trading of cyber currencies is now banned there. On the other hand, Western institutions have now opened up to Bitcoin & Co. Cryptocurrencies are now seen as a lucrative, albeit high-risk investment and are sometimes also included in the portfolios of large investment banks.

This can also be seen from the trading volume of cryptocurrencies. According to DerStandard, this increases reliably at the start of Wall Street trading and reaches its peak between 3.30 p.m. and 4 p.m. Central European Time. On the other hand, the trading volume at the close of the US markets (10 p.m. CET) decreases rapidly. As Coin Metrics tells CoinDesk, this correlation was strongest in the first quarter of 2022. If you want to trade Bitcoin, you should definitely keep these times in mind.

Better no trading on the weekend

In contrast to the stock exchanges, crypto trading does not rest even on weekends. Nevertheless, crypto trader and market analyst Cantering Clark advises CoinDesk to refrain from trading Bitcoin & Co. at the weekend. Thus, lower trading volume would make the crypto market more vulnerable to manipulation: “Weekends in legacy markets such as forex have always been thinner. Knowing this, banks nudge the market around to force moves. The same can be seen in crypto, which is why it has long been so the opinion prevails that any weekend activity is wrong and not durable. Never trust the weekend is something to keep in mind”.

DerStandard also used BitcoinMonthlyReturn data to determine that since 2010, the Bitcoin price was mostly weak in September and March, while according to the statistics it was more likely to post gains in April, May, October and November. Nevertheless, such statistics are not reliable indicators for future profits, especially since the original cyber currency is still quite young, i.e. the data situation is still quite manageable.

Strong fluctuations in gas fees

Finally, trading with DeFi currencies such as Ethereum should be discussed. This is where transactions are subject to so-called gas fees, which fluctuate greatly depending on how heavily the network is currently being used. Anyone who only trades small amounts but completes a transaction at an inopportune time can very quickly face charges that even exceed the amount traded. It is therefore all the more important to get a good entry and exit point here. Here, too, it is worth taking a look at the statistics. As Flipside data scientist Connor Higgins explains to CoinDesk, “If we break the charges down to the hour, we see fewer but larger transactions around midnight ET [Eastern Time, 5 Uhr morgens MEZ, Anmerk. d. Red.]and more activity around 5 p.m. ET [22 Uhr MEZ, Anmerk. d. Red.]which has long been the most expensive time to transact.”

However, this has now shifted to the point that more market participants would try to take advantage of the less active times to transact, which in turn would result in rising fees during what were perceived to be more favorable times. However, according to the data analysis company Nansen, it could also be observed here that the trading volume on the two largest crypto exchanges, Coinbase and Binance, would increase during the trading hours of the US exchanges.

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