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Author: Admin | 2025-04-28
Active during weekends, may drive prices in specific directions based on sentiment or technical triggers.Market Manipulation Potential: With reduced liquidity, it’s easier for large trades to influence prices, sometimes leading to short-term volatility spikes.Global Impact of Time Zones: Bitcoin trading is global, and time zone differences can create pockets of higher or lower trading activity at different times.For traders, understanding this effect is essential as it may provide opportunities for short-term strategies, although it also carries higher risk due to the increased unpredictability over weekends plus the lack of significant volume.Analyzing the weekend effect in Bitcoin trading – Strategy and rulesLet’s show you an example of the weekend effect in Bitcoin (and Crypto):Strategy 96 in our strategy list contains trading rules that work well on the two main cryptocurrencies: Bitcoin and Ethereum. Because they are premium strategies, we don’t want to reveal the trading rules and settings. However, considering the little time invested, the backtest reveals potentially potent returns.This is the equity chart of Bitcoin from mid-2014 until today:Bitcoin Weekend EffectThere are 103 trades, and the average gain is 2.6%. The win rate is 60%, and the max drawdown is only 19%. It is worth noting that the strategy is invested only 10% of the time, thus indicating a favorable risk-adjusted return: 280% (28% annual returns divided by 0.09).For Ethereum from 2018 until today:Crypto Weekend EffectTrading performance and metrics:#trades: 64Average gain per trade: 2.2%Annual returns: 18%Time invested: 9%Risk-adjusted return: 202%Win rate: 53%Max drawdown: 30%The strategy has performed much better for Bitcoin than for Ethereum. However, the correlation between Bitcoin and Ethereum is high.If you are interested in the Bitcoin Weekend Effect strategy, you can purchase it here (strategy #96):BUY NOWFactors Contributing to Bitcoin’s Weekend EffectHere are the factors that contribute to the weekend effect in Bitcoin, unlike traditional markets. Here’s a breakdown:Lower trading volume institutional absence Institutional investors who trade in higher volumes are less active on weekends. Lack of big trades can make the market more volatile. Reduced liquidityWith fewer participants, the market is less liquid and each trade has a bigger impact, so smaller buy or sell orders
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