What are crypto currency’s

The global and ceaseless nature of cryptocurrency trading poses a number of challenges for traders, one of which is finding the best time to trade.

Those looking to execute large buy and sell orders will need to identify times when there’s maximum liquidity(availability of counterparties at any given time for you to exit or enter a trade) and trading volume (how many times a coin changes hands at a given time). That's just like a grocer with vast quantities of produce to sell will ideally want to set up his stall at the busiest market with the most visitors.

For novice traders, or those looking to place smaller trades, liquidity is less of a concern. However, they may still want to trade on more established platforms because prices on those apps tend to be less affected by large orders or manipulation.

Finding the right hours to conduct trades is not just a challenge for spot traders (people who buy and sell with immediate delivery of assets,), but also for investors in decentralized finance (DeFi) tokens.

Blockchain transaction fees, such as Ethereum gas fees, can change dramatically from one hour to the next, and so it’s especially important for beginners with small portfolios to pay attention to those prices because gas fees are responsive to network congestion rather than to the size of a trade.

For example, someone looking to trade $100 worth of cryptocurrency may end up paying twice that amount in gas fees if he plans to execute the trade at a busy time.

CoinDesk asked crypto metrics firms, market analysts and professional traders to help illuminate the mysteries around crypto trading and why time matters.

Continental shift

Crypto trading had fairly straightforward patterns before its mainstream adoption began in earnest in mid-2020. Western institutions avoided crypto at all costs, and trading, along with other crypto activities like mining, was concentrated in Asia.

Until 2021, the Asian impact was so significant that bitcoin bulls would fear the Chinese New Year in Februarywhen miners would dump bitcoin en masse and send prices tumbling.

But those patterns changed.

“During the 2017 rally, the sunrise in Japan was a big deal for bitcoin prices,” Mati Greenspan, founder and CEO of investment advisory group Quantum Economics, said. “Now that Wall Street is more intimately involved, a lot of the action has shifted west.

“These days the early Asian session is so thin that we suspect some traders may be using it to manipulate the price,” he added.

There’s ample data to suggest that crypto trading activity coincides with traditional market hours in the U.S., illustrating that crypto investment largely shifted from the East to the West.

"Bitcoin spot volume tends to peak during U.S. stock market hours, especially at the opening bell,” William Johnson, an analyst at crypto analytics firm Coin Metrics, said.

According to a Coin Metrics chart shared with CoinDesk, the correlation with the U.S. trading hours was most pronounced in the first quarter of 2022, suggesting a clear evolving trend.

Simply put, the weekends have a drop-off in participation by smarter money,” Cantering Clark, a pseudonymous crypto trader and market analyst, said, referring to capital controlled by institutions and professional traders. He explained that there’s a high volume of activity by algorithmic trading bots and market makers (or liquidity providers) during weekends. “The market is less compelling to trade,” he said.