Cryptocurrency trading can seem like the wild, wild west, and in some ways, it is. But it’s been around long enough by now that we have some historical data about when the best time is — and isn’t — to make crypto trades.
Here’s what you need to know about the best and worst days of the week to trade cryptocurrency.
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The Best Day of the Week To Buy Crypto
According to the Corporate Finance Institute, the best time of the week to buy cryptocurrency is on Monday. Prices tend to start low on Monday and increase as the week goes on. Crypto can be traded 24/7 but more people tend to buy and sell during working hours. The market slows down at night and on the weekends. So, a Monday after a slow weekend can be the best time to buy.
Note that this analysis refers to buying cryptocurrency, not trading it. When you trade, you are buying and selling at the same time. According to SGT, you want to trade crypto when trading volume is high. When trading is active, you have more volatility and higher liquidity, which can be an advantage when you’re buying and selling at the same time.
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Trading Days and Times
SGT recommends timing your trades to coincide with the opening hours of the major global financial hubs. The opening of Asian markets happens between 12:00 a.m. and 7:00 a.m. UTC (Coordinated Universal Time). European markets are in session from 8:00 a.m. to 4:00 p.m. UTC, and the U.S. market is open from 1:00 p.m. to 9:00 p.m. UTC. (Note that UTC is five hours earlier than U.S. Eastern time, so the U.S. market is open from 9:00 a.m. to 4:00 p.m. ET.)
If you are trading Asian or European currencies, you may want to make your trades during the time those markets are open. If you’re trading currencies of different geographic areas, look for the period when the markets overlap to find the highest volume hours.
SGT also recommends trading mid-week. The consensus seems to be that traders are ramping up on Mondays and winding down on Fridays, making Tuesdays through Thursdays the days that see the most trading activity.
Other Factors That Can Influence Trading Times
The day of the week and time of the day that you trade may matter, but there are other factors that can influence the best times to trade as well. Here are some of these factors, according to SGT.
Market Sentiment
When there is favorable or unfavorable news in the crypto market, prices can rise or fall considerably. If a social media influencer posts about their recent purchase of cryptocurrency, for example, the currency may see a spike in interest from those who are not yet in the market. Conversely, a negative mention can cause traders to unload a particular currency.
Global News Events
When significant events occur worldwide, even if they are not specifically related to cryptocurrency, trading — and prices — can spike or dive. These market movers can include announcements about regulation, advancements in technology or geopolitical events.
AI Trading Bots
Bots are active 24/7, but their impact can be outsized during time periods when trading by humans is more subdued. On holidays, weekends and other times when trading tends to be slow, bots may dominate trading activity, which can cause prices to be more volatile than they otherwise would be.
Taking trading days and times, as well as the other factors mentioned here, into account when making crypto trades makes sense. But understanding your risk tolerance and goals, and having a plan for trading, can be equally, if not more, important than market timing. Like any investment, developing and adhering to a thoughtful strategy over time is often the secret to success.
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This article originally appeared on GOBankingRates.com: The Best Day of the Week To Make Cryptocurrency Trades (and What Days To Avoid)
