Flying in blind on a weekend trade can net you more profits – a questionable sentiment recently shared by a few in the cryptocurrency industry. However, considering the fact that a few coincidences in the past may have marked such a pattern in the boom and bust cycle brings the subject into focus. Moreover, with Bitcoin’s price surge in recent weeks, it’s imperative to consider how to leverage this sentiment – if true, as an essential technical analysis.
Remarks about Bitcoin’s rally so far in 2019 have varied from being influenced by a host of new initiatives such as Facebook’s Libra project, to the downright overall healthy Bitcoin ecosystem. Worthy of note, however, is fickle in the price of Bitcoin which may have been more intense in the recent weekends.
According to a post on Bloomberg, round the clock trading of Bitcoin may, in fact, be more profitable on the weekends as recent data showed 40% of price gains so far in 2019 came from increased trading activity on weekends since May.
About a year ago, data compiled by CNBC suggested two notable phenomenal Bitcoin price movements during the weekends:
“Around 82% of the weekends have seen a minimum of 3% move in either direction in Bitcoin prices.”
“Around 60% of the weekends have had a 5% or higher price move over a weekend since December of last year [2017].”
These observations were confirmed by former Morgan Stanley technical strategist Mark Newton, who noted at the time that “volatility on weekends” moved “dramatically up or down.”
Some of the reasons thought to be responsible for this anomaly have been attributed to anticipated news events spawn as speculative developments that may break in the wake of a new week as well as fear of missing out in times of sudden price fickle towards the end of a week. Traders and investors alike supposedly speculate on sudden news or important event that may trigger a price swing on Monday and tend to buy at the weekend dips.
According to David Tawil, president of ProChain Capital, to “bet that Monday morning would have a positive development,” isn’t a bad idea; basing his logic on the fact that the developments in crypto space do happen every day.
For speculators who are more acquainted with the goings in the traditional markets, this would seem rather odd given that Monday to Fridays are the most active trading periods for regular stock assets, and banking operations are limited to weekdays. However, cryptocurrency trading being a 24/7 activity often deviates from expected patterns, with weekends often determining what the new week’s price may begin with.
Overall, despite price movements showing higher volatility on weekends, it was observed that trade volumes were usually low, accounting for fewer people who were actually involved in the market activity. This observation was similar in both last year and current reports.
Generally, the cryptocurrency market at its core deviates from established capital market dynamics despite the semblance in token identity which for most cryptocurrencies represents the state of shares of companies traded on the capital market. However, for most cryptocurrencies in their native blockchain environment, they often portray more than just ‘shares’ of a cryptocurrency project, they perform certain functions within the blockchain ecosystem – utility.
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