Why is it Important for Traders to Understand Crypto Reset Time
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Crypto reset time is typically the time when trading operations begin, which are often from 8 a.m. to 4 p.m. In this article, we’ll help you understand why it’s important to look out and monitor the crypto reset time while trading.
What’s the Best Time to Trade?
The global and never-ending nature of cryptocurrency trading presents a lot of difficulties for traders, one of which is determining the ideal time to trade. Those wishing to perform large trades must identify moments when liquidity (the supply of counterparties at any one time for you to withdraw or enter a trade) and trading volume are at their peak (how many times a coin changes hands at a given time).
Volatility is less of a worry for rookie traders or those wishing to place smaller trades. They may nevertheless prefer to trade on more established platforms since their prices are less affected by huge orders or manipulation.
Finding the best times to trade is a challenge not just for spot traders (those who buy and sell assets with immediate delivery), but also for investors in decentralized finance (DeFi) tokens.
Be Wary of Weekends
Crypto does not sleep on weekends, but US equity traders do. So, how should we interpret the weekend trade activity?
"Simply, wiser money drops off on weekends," Cantering Clark, crypto trader and market observer, remarked, alluding to capital managed by institutions and professional traders. He noted that algorithmic trading bots and market makers (or liquidity providers) are very active on weekends. "The market is less enticing to trade," he explained.
Weekend volatility is lower, according to a realized volatility chart from Genesis Volatility. In general, traders desire volatility because it creates opportunities for profitable trading.
Weekends in traditional stock markets like FX have always been considered to be thin. Knowing this, banks would manipulate the market to force moves. The same issue can be seen in cryptocurrency, so for a long time, the concept was that any weekend activity was 'bad' and should be avoided. If bitcoin climbs over the weekend, traders often expect the market to fall over the week.
Markets are More Active During Reset Times
The fact that crypto trading hours are available 24 hours a day, seven days a week alters how we analyze daily numbers. If we have a start and closing price, it does not mean that the market actually began or ended at these prices. It only displays that a coin was worth one price at 00:00 hours and another at 23:59 hours because those are the bitcoin trading hours. There is no true close or true open.
If a currency is trading, it is being exchanged, and its price is, for lack of a better description, official. Furthermore, because the bitcoin market operates on weekends, any price chart will appear smoother. There will be sharp drops and rises, but they will occur naturally as a result of trading. There will be no surges and spikes caused by markets closing and out-of-hours trading.
Mondays and Fridays are Best for Trading
Monday has traditionally been the day when traders have seen the best trading returns, followed by Friday and Saturday. What about the most productive hours of the day to trade? The markets are busiest at about 12 p.m. ET, according to data.
The daily closing of a cryptocurrency market is significant for the same reasons that the daily close of the stock market is significant. Traders and fans may not have the time to monitor every cryptocurrency trading on the market for the entire day, but they can obtain a quick glimpse of how the cryptocurrency is performing by looking at the daily closing in the market.
However, like with any investment, past results and trends are no guarantee of future results. There's no guarantee that trading on these days or at these times will result in higher (or any) returns for a single trader or investor. It's also important to remember that these trends are likely to shift over time.
Observe the Market to Make Sound Decisions
You can make smarter crypto investment decisions if you grasp the fundamental supply and demand principles that underpin cryptocurrency value and the factors that influence them. News, media, events, and regulations around cryptocurrencies among other factors have a great influence on the crypto market. Still, you should conduct your own research, keep in mind that prices might fall as well as rise, and never invest more money than you can afford to lose.
The media's role in the financial market is to provide information and sentiment. Recognized financial media outlets can influence markets because investor behavior can be influenced by company news and events that receive extensive media coverage. Furthermore, Twitter social signal impact research has found that rises in opinion polarization and exchange volume predict growing Bitcoin prices and that emotional valence precedes rising exchange volumes and opinion polarization.
The Takeaway
Cryptocurrency markets are a roller coaster ride. Because they're so volatile, it's advisable to approach crypto trading and investment with caution and always keep an eye on the crypto reset time. However, unlike trading stocks or bonds, you won't be restricted by crypto market hours because cryptocurrency trading is available 24 hours a day, 365 days a year.
You can make intelligent cryptocurrency investment judgments if you grasp the fundamental principle of supply and demand that underpins cryptocurrency value and the factors that influence it. If you feel demand will rise for reasons X, Y, and Z and supply will not keep pace, bitcoin could be a solid investment.