Timing in crypto – the best and worst times to trade according to historical data

Despite the extremely low barriers to entry, investing in crypto remains a complicated endeavor. On the one hand, traders and investors have access to a wide variety of digital currencies at different price points and can conduct their trades at any hour of the day and night since the market operates 24/7 and doesn’t have a fixed schedule like traditional markets. Therefore, anyone from any corner of the world can buy crypto, be it Bitcoin, Ethereum, or any other digital asset, and begin their trading journey whenever they want, with as little as a smart device and a good internet connection – and, obviously, some start capital.

On the other hand, digital currencies are known to be incredibly volatile, as demonstrated by the Bitcoin price chart, and their value can rise or drop sharply and unexpectedly, making it just as likely to earn money as it is to lose. With countless factors impacting crypto prices, such as supply and demand, competition, market sentiment, regulatory changes, media coverage, or macroeconomics, it’s nearly impossible to predict crypto movements and figure out what might happen next.

Given this exacerbated instability, many wonder if there are certain periods when it’s best to trade crypto to increase the odds for positive outcomes. Although the crypto market seems to follow no rules and move erratically, historical data reveals there’s a thing called seasonality, referring to patterns and trends in crypto’s trajectory that recur during specific times.

Therefore, consulting these patterns and seeing when market conditions are expected to be favorable can help one determine the potential performance of crypto assets during certain time windows and plan their strategies accordingly so they can capitalize on market movements.

Exploring the best trading times for crypto

Experts recommend waking up early and buying crypto during the morning hours, preferably before the New York Stock Exchange (NYSE) opens. That’s because digital currencies tend to jump in price and start fluctuating as the day unfolds and the market becomes busier, so this will give investors the opportunity to purchase coins at a better price.

Apart from setting the alarm early in the morning to avoid busy market times and benefit from lower prices outside of the typical work hours, one should also consider a weekly timeframe. Usually, crypto follows an ascending trend, starting with lower values on Monday which then increase gradually over the week. When the weekend comes, prices are more likely to drop until the following Monday when they repeat the same pattern.

If we look even further and analyze monthly crypto behavior, we can observe that digital currencies have a tendency to surge during the first weeks and then go on a downward trend for the remainder of the month. Therefore, it might be better for traders and investors to sit on the sidelines at the beginning of the month and make a move in the second half when the market is quieter and values are lower.

However, it’s important to keep in mind that these general trends and patterns are by no means accurate predictors for future behavior and may or may not come to pass. Just because digital currencies have followed certain trends several times in the past doesn’t guarantee they’ll do the same in the future.

Guided by Bitcoin’s seasonality

As the largest and most popular digital currency, Bitcoin is usually the coin that influences the direction of all other assets and sets the trend for the rest of the market. So, the easiest way to identify the best times to trade crypto is to analyze Bitcoin’s past performance and see when the market is most likely to experience high volatility or, conversely, price increases and consistent returns.

According to available data, Bitcoin goes through several cycles in terms of performance throughout the year, so let’s take a look at its behavior, based on historical average monthly returns. Bitcoin is usually off to a slow start in the first months of the year, from January to March. January exhibits a negative performance of -1%, while February and March see positive returns of 8% and respectively 3%. This indicates prudence from investors who are slowly easing back into the market after the holiday break.

Things seem to pick up pace in the following quarter, from April to June. This is when Bitcoin usually experiences the biggest average returns of 29% for the month of April, as trading activity intensifies. May bolsters this renewed optimism with typical profits of 19%, while June is a bit more modest with 11% gains. Overall, the second quarter of the year tends to be quite bullish for Bitcoin, marked by significant price rallies signaling increased investor confidence.

The period from July to September is rather inconsistent as Bitcoin has moderate average returns of +7% in July, which go even lower to -2% in August and -10% in September. The bullish run from the previous months gives way to price corrections and consolidation for Bitcoin as investors take a step back and reassess their strategies.

Bitcoin generally ends the year on a positive note, as the final months, from October to December, reveal a notable increase in average return rates. October brings gains of 13%, paving the path for recovery after the decline in September. November is marked by considerable spikes, recording an average return of 21%, while things seem to calm down a bit in December when the average gains sit at 7%. Historical data also shows that Bitcoin is more likely to top its best performance in the last quarter, as it happened during the 2017 and 2021 November bull runs.

Final thoughts

It’s clear from these past trends that crypto performance experiences seasonal variations which can serve as guidance for traders and investors looking to improve their strategies and maximize returns. However, this is just one factor to be considered when getting ready to trade, as there are numerous other aspects that can impact market conditions and trading outcomes.

Author Profile

Adam Regan

Deputy Editor

Features and account management. 3 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com