It’s a common saying that cryptocurrencies tend to crash on the weekends… but what are the factors that motivate this behaviour? This is vital for understanding how to buy bitcoin.
We are going to show you the factors that influence this behaviour, and on top of that, we will show you how to invest in cryptocurrencies like a professional.
The simplest answer is here: because a lot less action takes place during the weekend. You won’t see as many trades as during the weekdays. Therefore, there’s lesser volume, and hence, the action seems to either crash or move sideways.
The problem here is that when the volume is low, the same trade size can have a more profound impact. Therefore, some whales like to play it to move the price down, allowing them to have better entries or to continue their narrative.
It’s harder to trade the volume, but it’s a good tool to keep in your arsenal if you are planning to trade cryptocurrencies for a living. You need to know that a low volume in the market makes it easier to manipulate, and unless you’re aware of these market moves, it will negatively affect you, especially if you commit the mistake of trading with leverage.
You can use this to your advantage because you can easily buy bitcoin with credit card during the weekend and sell during the weekdays. This is a trading strategy that some crypto enthusiasts follow, and by reinvesting the profits, you can actually grow your capital.
The weekend usually increases the selling pressure and fear, which as we all know, equals lower prices. Especially if the weekdays had a lot of chaotic and bearish price action. During the weekend, this same PA will likely turn even worse, which will cause the crypto prices to fall even more.
Fear will always move the market down, and if the volume goes down as well, it’s easy for whales to amplify these negative feelings to bring the prices to lower ranges.
So, should you buy cryptocurrencies on the weekend? It depends. We will let you know more about it in this section, along with other strategies that might be better and less riky for you.
As we know that cryptocurrency values tend to go down on weekends, it’s evidently better to buy here and during the weekdays. It all sounds good but there’s a catch: it depends on the entire market structure.
If the market structure and Price Action have been very weak during the entire week, then you need to be careful because there are chances that it can keep going down during the next weekdays.
Therefore, if you want to play this strategy, we recommend you to follow this advice:
- Always buy in batches, so you can get a better entry
- Sell as soon as the prices peak during the weekdays, especially if the PA is still weak
- Take out profits and reinvest at your own risk.
This is more like scalping, rather than a swing trading strategy. Therefore, realize that this is a quick make money and run operation.
If you want to make a profit from cryptocurrencies, then you need to be smart when it comes to administering your risk. Given the volatility of the crypto market, you need to be more conservative. Here’s what you need to do.
This strategy is riskier, and therefore, you should only use a small part of your portfolio. This way, you can protect your funds in case the cryptocurrency prices keep diving.
It’s important to buy in batches so you can average in. This way, you will get better entries, and hence, get more profit potential.
This is more like scalping, and hence, it’s only a matter of making a bit of cash and run. This is not swing trading, you must treat it like scalping to keep your expectations down and protect your capital.
Finally, always set a stop loss. It’s easy for a -5% loss to become a -25% loss if you don’t set a stop-loss in advance. Remember, always protect your capital at all cost.
Now you know why the crypto prices tend to go down on the weekends, and hence, you can use this to your own advantage. Remember to follow all of our tips and you will be doing better than the majority of new crypto traders and investors.