While Saturday nights are eagerly awaited by many as a much-needed break from the workweek, but it is apparently emerging as the most crucial time for Bitcoin traders to buy and sell the most popular cryptocurrency.
According to Bloomberg, weekend spikes from the start of May account for approximately 40% of Bitcoin’s price addition in this year. As a matter of fact, a study of Bitcoin’s historical price data reveals that some of the biggest price changes occurred over the weekend. For instance, the highest Bitcoin price in history of $19,666 peaked on a Saturday in December 2017.
Cryptocurrency trading continues non-stop on a 24/7 basis across the various exchanges spread all over the planet. While many see this as an advantage with the potential benefits of making profits at the convenience of the active traders, it also comes with the challenges of constantly monitoring prices and making timely trades to book profits and cut losses during the odd-hours.
It is essentially turning out to be a case of frequent sleepless nights and busy weekends for the active crypto traders.
Mark Newton, a former Morgan Stanley technical strategist and the president and founder of Newton Advisors, which provides cryptocurrency technical analysis to hedge funds and other firms, confirms the observation:
“We’re seeing above-average volatility on weekends with it moving dramatically up or down.”
To be Ahead of the Pack
Just like in the traditional stock market where majority of the bigger companies delay the announcement of important business decisions and activities, for instance, Merger Monday, is well known as companies make acquisition announcements on Mondays.
Similarly, the trend is also becoming popular with crypto firms as they chose Mondays to make significant announcements. In this regard, majority of crypto traders are trying to be ahead of the news deluge by transacting over the weekend.
The president of crypto hedge fund ProChain Capital, David Tawil explains:
“It’s a little bit of anticipatory or front-running the news cycle by trading up on the weekend. I don’t think it’s wrong to bet that Monday morning would have a positive development in an ever developing crypto industry.”
The Groupthink Concept
Another reason is that various crypto investors could spend their weekends deliberating on different news items with their friends or colleagues investors, prompting them to trade their digital assets.
Chief executive officer of Bitwise Asset Management Hunter Horsley explains:
“Weekends are a time when people have more free time to read the week’s news, to chat with friends, to pitch friends on exciting things they heard about during the week.”
This could be true since as Bitcoin’s price was exploding in 2017, Thanksgiving events across the US were dominated by Bitcoin talks.
Similarly, large blockchain and crypto events have also led to an upward Bitcoin push due to the excitement they bring to crypto enthusiasts. For instance, the price of Bitcoin increased tremendously during New York’s blockchain week in May.
The Fear of Missing Out (FOMO)
There crypto enthusiasts who witness Bitcoin’s price gain tremendously during the week and out of anxiety of missing out on future gains, they jump into the fray. Opportunistic investors want to cash in on weekends after a successful week in the crypto market.
What do you think makes Bitcoin’s price to spike over the weekends? Let us know in the comments section.