The cryptocurrency market runs 24/7. When people in America are going to bed, people in China are just sitting down to lunch.
Despite this, we set out to uncover the trends. To identify exactly when the best time to trade is.
We pulled and analyzed the complete bitcoin dataset from Binance (the largest exchange) since it first opened in 2017.
The patterns were perfectly clear.
When are people trading?
To answer this question, we looked at how the volume varied by hour over the course of the day.
As you can imagine, the volume traded on Binance has been steadily increasing since it first started. To normalize the data, we looked at what percentage the volume was higher or lower than the average for the day.
Eg) if the volume from 3-4pm was 120 btc, and average for the day was 100 btc, then 3-4pm would have a score of 20% for that day
The results are shown below.
Times are shown in UTC, which also happens to be the same timezone as London.
Volume starts off high from 12-1am London time. It then decreases until just before noon and afterwards picks up again, peaking at around 8pm.
The highest volume window being:
4-9pm in London
11am-4pm in New York
7pm-11pm in Moscow
12am-5am in Beijing
3am-8am in Sydney
What does this mean for you?
Most Technical Analysis strategies look to volume to know whether a move is sustainable or not.
Meaning you're more likely to judge a setup correctly if it's trading with higher volume.
For this reason, it's generally better to during the high volume window than it is earlier.
Can we go deeper?
We now know to look for setups later in the day, but what about the day of the week?
Are people likely to be trading while they enjoy their coffee Monday morning? Or what about Saturday when they're off for the weekend?
To find out more, we looked at how the volume varied by hour for each day of the week and hour of the day. The results surprised us.
Trading volume was significantly higher during the week than it was on the weekend.
Aren't people supposed to be working during the week?
Volume starts off low on Saturday and Sunday, picking up slightly on Monday and then goes strong Tuesday-Friday.
The takeaways from before still hold true, trade with the volume to make better calls.
From this analysis, that means Tuesday-Friday.
Volume is great, but is there price action too?
Unless you're trading with high leverage, it's important the price changes enough for you to make a profit.
We assumed that high volume would also mean high price volatility, but we wanted to double check this with the data.
And it did! Almost a perfect fit.
I say almost because the truth is that there is a bit more going on.
There's high volatility during the week from Tuesday-Thursday and low on Saturday and Sunday.
Monday is a bit of an outlier. It has nearly the same volume as the other weekdays, but volatility is closer to Sunday.
What does this mean for you?
Volume is pretty much universally good, but volatility not as much.
Experienced traders love volatility. It means bigger swings with sweeter wins and more devastating losses.
If you're an experienced trader then take note, you should do more of your trading from Tuesday-Friday when the price is likely to fluctuate more.
Inexperienced traders, on the other hand, might prefer less volatility. The weekends can be good for this as things happen slower and you can take more time doing your analysis.
To find the best of both worlds, Monday might be your best option. Having a compromise of good volume and lower volatility.
Which is the best time of the day to trade cryptocurrency?
- In the evening from 4pm-9pm UTC.
- Mondays-Fridays are ideal for volume.
- If you want more volatility, Tuesday-Friday.
- If you want less volatility, Saturday-Monday.
We hope this information has been helpful. Now it's time to put it into action.
To save time and improve your trading, use Signal, our simple automation tool.
Signal simplifies the unnecessary complication of trading so you can focus on the things that matter – your strategies.
PS. What about profit? Is there a best time for that?
Unfortunately there isn't. We ran the numbers and your expected ROI is pretty much random for each time of the day.
You're still reading? Go check out Signal already! Seriously, you'll love it 😄