A very common observation about bitcoin price surge is observed on weekends that everyone noticed but no one asked the question. Why does bitcoin price surge so much during the weekends? The report dives into a few factors on how they might be at play here.
The report notices that although bitcoin trades for the whole week, about 40% of the total surge of bitcoin’s value happened on the weekends. The report also points to the fact that when bitcoin reached its maximum value in 2017 of $19,666 that day too was a Saturday. Unlike other commodities and securities, bitcoin can be traded anytime because the technology that powers bitcoin needs no humans working full hours to record the transactions that’s the beauty of blockchain.
Even though there might be several reasons why bitcoin prices spike during the weekends, the report explains the following few reasons:
Like in all industries, the weekend is off in the crypto sector, even though trading is still live, crypto news sources tend to write about major developments on Monday. Same is the case with companies announcing new updates right when the week starts.
This has been the norm on Wallstreet and other financial hubs for decades and has even been coined in a phrase, Merger Monday because most companies make their acquisitions public on Monday. As any positive development on Monday might be really good for the price of bitcoin, so investors invest during the weekends to get ahead on the game. The President of crypto hedge fund ProChain Capital David Tawil is quoted in the report saying:
“It’s a little bit of anticipatory or front-running the news cycle by trading up on the weekend. You’re somewhat flying blind in the sense that you don’t know if there will really be an announcement made on Monday morning but in a packed news cycle like crypto, where there are developments really every day, I don’t think it’s wrong to bet that Monday morning would have a positive development.”
More Trading Volumes on the Weekend:
International Operations lead at Montreal based Decred crypto Jonathan Zeppettini has a different view for the price surge. According to him, the weekend tends to bring in more volume of money, even though people who trade are less in numbers. But those who trade try to get as much volume to invest as they can so their trades can go unnoticed. In the report Zeppettini is quoted:
The fact that these markets are operating when the banks are closed leads to price movements being exacerbated. It also takes a lot less to move the needle when everyone’s sleeping or it’s the weekend.
CFTC Report on Friday’s
The Commodity Futures Trading Commission publishes a report for traders every Friday, the report contains all the latest news, speculations, previous performances and also highlights who different experienced traders are betting on.
The report is a guide for people who want to trade seriously, it is a trade 101 lesson for people with less experience. The indicators such as short-only positions provide details on what positions prominent “big boy” traders have on a particular security. Tawil talking about the report said:
It would get digested as quickly as people can get to it and since it does come out on Friday afternoons, people may not be able to digest it until Saturday morning