The Shine Is Off Bitcoin As Dip Buyers Remain Scarce
The worlds largest cryptocurrency has been languishing around $47,000, well below early Novembers highs of nearly $69,000.
The malaise surrounding Bitcoin runs far deeper than its price.
The worlds largest cryptocurrency has been languishing around $47,000, well below early Novembers highs of nearly $69,000. A look under the hood helps explain why: Trading volumes have dried up, futures open interest is plunging and the number of active addresses has stalled out.
Taken together, the data paint a picture of diminished animal spirits after Bitcoin peaked following the fall launch of the first U.S. futures-tracking exchange-traded funds. Dip buyers a once-reliable fixture in cryptocurrency markets have yet to meaningfully reemerge even after a 33% drawdown. Meanwhile, after billions of dollars worth of leveraged positions were flushed out in last months flash crash, new investors have yet to fill the void.
There was a lot of leverage in the system in May and then in the lead-up to November, said Jim Greco, a managing director at Radkl, a crypto-trading firm. There could be a lot of people who got washed out and they need to be replaced by new capital.
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In the past, crypto-crashes have happened largely independently from wider market routs. The sharp drop in May, when cryptocurrencies lost 47% of their value in a week, was prompted by a clampdown on crypto-trading in China and a tweet by Elon Musk, Teslas chief executive, saying that the electric-vehicle maker would stop accepting payments in bitcoin. By contrast, the recent drop in crypto prices has mirrored that of American markets, which suffered on December 3rd after the latest monthly jobs report sent mixed signals about the countrys economic recovery. The unemployment rate dropped by 0.4 percentage points in November to 4.2%, the lowest since the pandemic began. That may have indicated to investors that the Federal Reserve would raise interest rates sooner than planned, lowering the returns on riskier assets. Stocks, including those for tech firms, fell. The discovery of Omicron, the new variant of covid-19, on November 24th has also increased anxiety in the markets.
More from The Economist explains:
Best Time Of The Day To Buy Cryptocurrency
Again, because crypto trades all day long, even into the wee hours of the morning , timing your trades to a certain time of day can be fraught with peril. However, if you analyze a few months of data, a few very general patterns emerge.
Comparing the trading activity of Bitcoin, Ether, Solana, and Cardano — cryptos with some of the highest cap rates — shows that they tend to rise and fall together, which is pretty handy for the sake of comparing windows of time for buys.
Looking at data from October and November, the very best time of day to purchase these popular cryptocurrencies generally was in the morning, and the earlier, the better. Other coins that are not considered to be as “serious” also followed similar patterns as Bitcoin and Ether, such as Shiba Inu and Dogecoin.
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Cryptocurrency Weekend Trading Now Available
Cryptocurrency Weekend Trading is Now Available on 4 Cryptocurrencies:
You have the opportunity for the weekend trading this four cryptocurrencies Bitcoin, Ethereum, Litecoin and Dash. Now you can trade cryptocurrency every Saturdays and Sundays at Avatrade.
Are There Any News Releases On The Weekend
Weekends are usually slow as most large market participants close their doors on Friday and reopen on Monday.
Not only that, most commercial companies, banks, and hedge funds dont work on Saturday and Sunday, but important government agencies that are responsible for country-related macro-statistics are also closed. This also means that weekends see a much smaller number of news releases compared to regular workdays.
However, certain events that might happen on weekends, such as natural disasters, political developments, and important news can also have a significant market-moving effect. If a market opens with a gap to the upside or downside, this likely means that there were certain events over the weekend that affected the opening price.
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Top 10 Forex Brokers That Trade Cryptocurrency On Weekends
In this article, well look at forex brokers that trade cryptocurrency.
Youll need an internet broker to trade FX.
Trading with a reputable forex broker is essential for achieving success in the global currency markets.
You may have special needs as a currency trader or investor in platform, tool, or research requirements.
Understanding your investment style might assist you in deciding which forex broker that trades cryptos is right for you.
Which Cryptocurrencies Are You Interested In Trading
Make sure you have decided on which cryptocurrencies you want to trade in before signing up with your broker.
If your choice is a prominent cryptocurrency like Bitcoin , Litecoin , or Ethereum, there will be a relatively broad availability of brokers that have trading options for those. However, less prevalent examples like Monero, IOTA, or Zcash may be a little harder to come by.
So study the cryptocurrencies being offered by a broker before you sign up for an account.
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Get In Touch Call Or Visit A Branch
Check the background of TD Ameritrade on FINRA’s BrokerCheck
Carefully consider the investment objectives, risks, charges and expenses before investing. A prospectus, obtained by calling 800-669-3900, contains this and other important information about an investment company. Read carefully before investing.
Futures and futures options trading involves substantial risk and is not suitable for all investors. Please read the Risk Disclosure Statement prior to trading futures products.
Futures accounts are not protected by the Securities Investor Protection Corporation .
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How To Invest In Cryptocurrency
Cryptocurrency can be purchased on peer-to-peer networks and cryptocurrency exchanges, such as Coinbase and Bitfinex. Keep an eye out for fees, though, as some of these exchanges charge what can be prohibitively high costs on small crypto purchases. Coinbase, for instance, charges a fee of 0.5% of your purchase plus a flat fee of $0.99 to $2.99 depending on the size of your transaction.
More recently, the investing app Robinhood started offering the ability to buy several of the top cryptocurrencies, including Bitcoin, Ethereum and Dogecoin, without the fees of many of the major exchanges.
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What Broker Trades The Most Cryptocurrency
According to our analysis, eToro has the most cryptocurrency pairs to trade.
Investors can use eToro to purchase and sell bitcoin , trade crypto CFDs, and even imitate other investors trades.
10 Forex Brokers that Trade Cryptocurrency on Weekends
- IG Overall, the best and most reputable FX broker.
- Saxo Bank is a financial institution that specializes in financial services Ideal for doing research
- CMC Markets The most currency pairs, the best web platform
- Professionals and institutions will appreciate Interactive Brokers.
- City Index Excellent all-round product TD Ameritrade FX Excellent trading platform, US only
- XTB Outstanding customer service and a fantastic platform.
- Forex.com is a fantastic all-around provider.
- eToro is the best trading site for copying other peoples trades.
- AvaTrade AvaTrade offers several different trading platforms.
- HYCM Crypto CFDs are available in over 60 different currencies.
The hours on which forex market players can buy, sell, swap, and speculate on currencies worldwide are known as forex brokers that trade cryptos hours.
On weekdays, bitcoin forex brokers are open 24 hours a day, while weekends are closed.
How Does Crypto Cfdtrading Work
Bitcoin is a digital cryptocurrency that derives its value from supply and demand factors unique to this asset class.
Bitcoin is available in a finite supply and therefore increases in price as demand increases.
Demand stems from speculative sources and more practical sources, for example Internet purchases paid for in Bitcoin.
Bitcoin also has a tendency to react to market sentiment in more traditional markets such as equities and foreign exchange, increasing during periods of negative sentiment.
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What Cme Stands For
CME Group Inc CME stands for Chicago Mercantile Exchange. It is the worlds largest financial derivatives exchange. This futures platform allows one to trade variety of asset classes like: agricultural products, energy, stock indices, fiat currencies, interest rates, real estates, metals and even they have futures trading options for weather.
In late 2017 CME launched trading of Bitcoin futures contract. Currently Bitcoin is the only cryptocurrency available for trade on CME. According to CME group the daily traded volume of Bitcoin on this platform is reported to be more than $100 million USD or 10000 BTC.
Alright! Now what is a price gap and what constitutes a gap on a chart?
The Best Crypto Portfolio Tracker On The Market
Most crypto traders approach the market from a gambling paradigm. They have no quantified method, and if they do have one, they cant get themselves to follow it. In fact, 90% of all traders lose 90% of their investment within the first 90 days of trading. This is a complete review of Coin Market Manager, a trade journaling software.
Coin Market Manager aims to change that status quo. It is the leading automatedj ournaling and analytics tool for crypto traders and was built by a team of professionals who understand the challenges crypto traders face.
The best Crypto Porfolio Tracker has arrived!!!
Coin Market Manager works in a very straightforward way. Think of it as your digital mentor on your journey to crypto success. You feed it with information and within seconds it starts working for youit helps you understand your method and become a better trader.
They provide crypto traders with the tools and insights they need to effectively manage risk, improve profitability, and avoid becoming part of the 90/90/90 statistic.
The software has a sleek interface and is very simple to use. No math skills are needed here, Coin Market Manager does all the heavy lifting in the background and generates complete trade analytics reports showing you exactly how your strategy and performance are evolving over time. Click here if you are interested in Crypto Day Trading!
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Behind Crypto’s Ugly Weekend ‘cascading’ Selloffs And Dashed Hopes For Bitcoin $100k
“Hodl” no more?
The grim weekend cryptocurrency drubbing that dragged Bitcoin under $50,000 and ravaged other digital coins has decisively tempered the bullishness of investors some of whom were predicting a run at $100,000 just weeks ago.
Fueled by uncertainty over the Federal Reserve inching toward tighter monetary policy in the face of surging inflation, and global fears over the new Omicron variant of COVID-19, the dramatic crash was super-charged by liquidations in the crypto derivatives market, market players say.
Only Friday, Bitcoin sat above $57,000 before the risk aversion hammering stocks spilled over into crypto world dragging the premier digital coin down by as much as 20% on the day to below $43,000. On Sunday, the currency bounced by over 2% to trade around 49,000.
Bitcoin “has been the best-performing asset out of all asset classes 10 out of the past 12 years it’s been trading,”Perianne Boring, president and founder of the Chamber of Digital Commerce, a blockchain advocacy group, told Yahoo Finance on Monday.
“To have anywhere from 30-40% volatility in any given month, that’s normal for bitcoin. This is not a unique situation,” Boring added.
According to estimates by Larry Cermak at The Block Research, nearly $5 billion in open interest was wiped out in as little as half an hour. That helped to shave cryptocurrencys total market capitalization down to around $2.3 trillion, off sharply from last months record high above $2.6 trillion.
Should You Invest In Cryptocurrency
Experts hold mixed opinions about investing in cryptocurrency. Because crypto is a highly speculative investment, with the potential for intense price swings, some financial advisors dont recommend people invest at all.
For example, while Bitcoin has nearly doubled in value over the last year, reaching a price of over $18,000 in November 2020, its also drastically lost value in the same year, like when it bottomed out at under $5,000 per Bitcoin. Even Bitcoins recent highs, however, are still lower than its 2017 peak of about $20,000 per Bitcoin. All of this is to say, cryptocurrencies, unlike most established currencies, can be very volatile and change value frequently.
Thats why Peter Palion, a certified financial planner in East Norwich, N.Y., thinks its safer to stick to currency thats backed by a government, like the U.S. dollar.
If you have the U.S. dollar in your cash reserves, you know you can pay your mortgage, you can pay your electricity bill, Palion says. When you look at the last 12 months, Bitcoin looks basically like my last EKG, and the U.S. dollar index is more or less a flat line. Something that drops by 50% is not suitable for anything but speculation.
That said, for clients who are specifically interested in cryptocurrency, CFP Ian Harvey helps them put some money into it. The weight in a clients portfolio should be large enough to feel meaningful while not derailing their long-term plan should the investment go to zero, says Harvey.
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Why Is The Cryptocurrency Market So Volatile On The Weekends
Its been known that the cryptocurrency market tends to be more volatile during the weekend, but analysts are confused as to why.
The cryptocurrency market is unique in that it is on 24/7. Unlike traditional markets like stocks, cryptocurrency trading never sleeps. If youve been around since 2017, you might also have noticed that it is during the weekends that volatility tends to be more apparent. In fact, it was commonly called the inevitable weekend dip.
The truth is, however, this assumption is actually not based on reality. The only consistency has been that weekends are usually a time of great volatility with no way to predict it. Take, for example, just the past few months: 40 percent of Bitcoins price gains have occurred on the weekends since May. In 2017, Bitcoin reached its all-time-high on a Saturday in December 2017. Both of these examples point to more than mere coincidence.
% To 018% Of Trade Value1
with No Added Spreads, Markups or Custody Fees
While other crypto exchanges and brokers charge trading fees as high as 2.00% of trade value or more, and add spreads or markups to the cryptocurrency price, cryptocurrency trading with Paxos on Interactive Brokers platform has a low commission of just 0.12% to 0.18% of trade value1 with a USD 1.75 minimum per order . Plus, there are no added spreads, markups, or custody fees.
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Cryptocurrency Brokers What To Look For
Here are some of the more understated details about your cryptocurrency broker that could make your trading experiences so much more efficient and successful.
1. What Are The Weekend Hours Like?
This is a key detail that distinguishes cryptocurrencies from other prominent trading markets like forex, futures, and equity. Cryptocurrency brokers operate during the weekends as well.
There is virtually no difference in purchasing bitcoin at the end of the week as opposed to the middle of the week during peak hours.
But there is a catch. While digital currency exchanges are available during the weekend, your broker may not . So in effect, if there is considerable movement within your relevant cryptocurrency market during a weekend when your broker is not operating, you may not have the ability to respond in any way.
2. How Is It Hedging?
Your broker is probably not keen on revealing if it is hedging cryptocurrency traders but it is important information for you to know.
Why is it so important for you to know?
Testing The Days Of The Week Strategy
To find out, we decided to take a closer look at the average BTC price returns for each day of the week, including weekends. As we often do in our analyses, we use BTC as a proxy for the entire crypto market, as it still very much dictates the price action of most altcoins over time.
To start, letâs take a look at the average log returns for Bitcoin from 2017 until present day:
Note for stats geeks: When you average over returns you probably want to use log returns . When averaging regular returns you run into problems with summing up positive and negative returns. Imagine an asset dropping 50% and then going up 50% the next day. The average would be a return of 0% when in reality you would be at -25% because you first lose half of your money and then only get 50% on that half of your money. Using log returns solves that problem.
Voila! We can immediately see there are some big differences between BTC returns on different week days:
- Monday and Saturday emerge as clear winners, with average returns of +0.69% and +0.5%, respectively. If you bought BTC every Saturday from the start of 2017 until today and sold it the same night each time, your current Bitcoin portfolio would be sitting comfortably in the green.
- Wednesday, Thursday and Sunday all returned negative values for the past 2 years. To date, Wednesday proved to be the worst performing day.
In the observed time frame, our strategy would pocket us a cool 68% profit, while HODLing Bitcoin resulted in about 38% loss.
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