An analysis by Kate Rooney at CNBC reveals that the weekends are no time to rest and relax for Bitcoin traders. Since December 2017, 60% of weekends have seen a price swing of 5% or more, and 82% of weekends have seen price swings of 3% or more, according to data from CoinMarketCap. Indeed, this past Sunday, 10 June 2018, Bitcoin’s price declined more than 10%, plunging it below the USD 7,000 mark.
Polar opposite to Sunday’s crash, Bitcoin hit its all-time high near USD 20,000 on a Saturday in December 2017. Some of Bitcoin’s biggest price changes have occurred on the weekend, and Bitcoin traders must remain vigilant to protect their investment from losses and to catch opportunities to profit.
The lack of a weekend is different from trading stocks; in general, stock exchanges close for the weekend. Bitcoin and cryptocurrency is decentralized, so there is no way to force trading to close on the weekend. It wouldn’t make sense for a cryptocurrency exchange to close on the weekend since they would miss out on trading profits.
The founder and CEO of the digital investment firm BKCM says weekends are even more volatile for Bitcoin than the work week due to lack of liquidity, since banks are closed on the weekend. Most Bitcoin purchases are done with bank transfers, and hedge funds usually have to stick to Bitcoin positions put in place on Friday before banks close. If there is any sort of news or a Bitcoin whale makes a big trade, its effect on the market is amplified due to the lack of liquidity.
This same principle applies for night time on any given day since banks close in the early evening, but during the work week, banks are always open somewhere on the planet. The weekend is the only time that almost all the banks on the planet are closed, cutting off the flow of fiat into and out of the cryptocurrency markets.
In weekend emergencies, Brian Kelly says he uses Over The Counter markets, but these are only available to SEC approved broker-dealers. Normal traders can use their debit cards on a limited selection of cryptocurrency exchanges at much higher fees if they want to play the Bitcoin market on the weekend, or go to a peer-to-peer Bitcoin dealer for even higher fees.
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