Cryptocurrencies, unlike stocks and currencies, are quite difficult to trade and keep a track of simply because the market is always open. According to a detailed analysis by LongHash, using data from July 2017 to July 2019, Bitcoin shows the most volatility between 12 A.M and 1 A.M UTC, July 17, 2019.
Time Zone Analytics
Initial insights drawn from the data shows over the past two years, a bulk of the price movement comes between 12 A.M and 1 A.M UTC. More daily lows and high have come during this one hour time frame than any other.
This one hour zone represents the beginning of the evening in North America and the beginning of the workday in Asia. Traders in Asia react to the news they wake up to, and North American traders react to the Asian sentiment.
Secondly, the chart indicates that there is no ‘right time’ in the day to buy Bitcoin as over the last two years, the differences in time zones that had a daily high or low were small enough that it would be unwise to consider them as meaningful inferences.
These charts go on to strengthen the notion that time in the market beats timing the market. However, buying during very obvious parabolic pumps and falling victim to the famous crypto FOMO also teaches us that timing matters too.
Optimally Trading Bitcoin
It’s important to understand the nuances of the market before jumping into positions that either leveraged and particularly designated for the short-medium term.
A lot of rookies attempt to play the market swings without a basic understanding of how market dynamics function. Volatility in Bitcoin is both a boon and a bane. It allows experienced and unemotional traders to take advantage of steep swings but also magnifies the losses of those who simply jump in expecting immediate gratification from the market.
Taking the time to understand how everything works and what drives the market can make the world of a difference. Time sat out just analyzing and not acting improves individual knowledge of the functional aspects; it shouldn’t be considered a waste of time.
Timing the market, as indicated by LongHash, is not important for long term investors. Despite this, most tend to only buy after massive bullish cycles and fall prey to fear during corrections. Always keep in mind that with huge bull markets come bear markets of equal magnitude.