Many investors have asked, “Do Bitcoin prices go down on weekends?” This article will answer that question from two different perspectives. Short-term, based on speculative activity, and long-term, based on regulators’ stances on cryptocurrencies. This article also discusses the potential role of influencers in influencing prices and speculative activity. After all, these influencers could be the reason why prices may drop on weekends.
Price Fluctuations
Many analysts have noted that the high level of speculative activity has contributed to the volatility of prices. However, the lack of market data makes it difficult to determine how much speculation has affected the price. The current price-to-inventory relationship in the oil market seems to be altered by the speculative dollars invested by institutional investors and hedge funds.
Speculative activity refers to the trade of high-risk financial instruments hoping for a higher price. Speculators usually invest in volatile markets, expecting to make significant returns in the short run. Although many financial experts frown on speculative activity, speculators are very helpful and often contribute to the overall market’s fluctuations. Here are a few examples of the types of investments that speculators typically make:
As a result, many economists argue that price limits can increase liquidity. In the short run, this reduces the risk of excessive volatility and price reversals. On the other hand, price limits reduce market volatility by allowing informed traders to enter the market. They can then steer prices towards their fundamental values. While speculative activity is beneficial, it is essential to remember that speculative activity isn’t the primary cause of price fluctuations.
Although speculative activity can be detrimental to society, it can also benefit the economy. A farmer can sell a crop to a speculator and hedge his risk of the price going too low by harvest time. By doing this, he can maximize production and reap the benefits. By implementing such a policy, speculative activity is beneficial to society. It helps stabilize prices and increases production.
Volatility Based On Regulators
Market volatility will expose brokerages that don’t supervise their employees and are not in compliance with the Regulation Best Interest rules. Regulators are urging brokerages to train their sales representatives to make the best recommendations possible. They may even suspend their services if they feel that their reps are not following regulations. But this is a risky proposition.
EPA published a rule on October 24, 2018, which relaxed the federal RVP requirement for some Louisiana parishes. No Louisiana parishes now have to meet the 7.8 psi standard. However, the EPA can impose a higher volatility standard if necessary. The final rule was effective on April 12, 2021. The new rule will apply to all regulated parties in those counties.
Historical volatility data may be excluded in some cases because of unusual conditions in the market, such as the credit crunch in 2008 or the COVID-19 pandemic.
Companies should disclose their methodology for calculating volatility. The methodology used should be consistent and unbiased. The weightings of contributory sources should be reasonable, too. And the method of selection should be based on historical volatility or the implied volatility of a peer group.
Companies should use historical volatility as a starting point and adjust the estimate based on future experience.
Bitcoin Whales
The recent discovery of a massive bitcoin whale is evidence of how the price of BTC can move up or down within days. The massive order, liquidated on October 14, 2014, saw the purchase of 30,000 bitcoins at $300 per unit. Some traders worried the massive order would wreck the market, but it was ripped apart by buyers, and bitcoin rallied to $375. The whale’s name was given to the trader after the massive order appeared online. A video showing the massive whale’s death, posted to YouTube, helped many bitcoiners feel like they were winners that day.
The number of orders placed on Bitcoin over the weekend is much lower than on weekdays, indicating that Bitcoin whales are actively selling or amassing BTC over the weekend. However, these days are typically low volume so the weekend effect can lead to significant price swings.
A bitcoin whale is an investor with an abnormally high amount of bitcoins. These investors are called “whales” because of their massive holdings of Bitcoin. These investors are not uncommon to hold billions of dollars of digital currency. They also tend to purchase it like toilet paper. The number of bitcoins available is limited, and, ultimately, this will deplete its supply.
While many traders have argued that the whales are manipulating the market and influencing the price, it is impossible to prove this with certainty. But one thingcertainsure: Bitcoin whales positive weekends to amass or offload bitcoins. It is vital to monitor these investors’ activity. You can open a SoFi Invest brokerage account if you want to buy Bitcoin.
Read More: The Expert Announced The Impossibility Of Predicting The Bitcoin Rate
Short-Term Perspective
In a recent article, Joe Weisenthal, a financial journalist, argued that “chaos cuts both ways.” The same thing applies to Bitcoin, as a situation that is good for the currency may also attract regulators. Thus, the recent story of a Canadian trucker could be bullish for Bitcoin while being bearish for its price, as state actors may be interested in regulating the cryptocurrency.
However, the outlook for bitcoin prices has dimmed in the short term. In particular, some analysts predict a further drop after the recent significant drop. However, those still buying crypto last year may regret their decision. Moreover, if they sell, they’ll lock in their losses and miss out on future price increases.
Because the markets are so thin on weekends, there isn’t as much trading volume as on weekdays. Meanwhile, investors may be unable to add more money to their accounts, making these weekends crucial. Interestingly, the weekend’s volatility was less extreme than last year.
The recent bitcoin fall signals that the market is in a new trend. Bitcoin is nearing $30000, its lowest since July 2021. According to Mudrex, the algorithm-based crypto investment platform, this downward trend will likely continue for the next few days. And if the prices fall further, they may even touch $30,000.
In the long run, this decline is a temporary dip. Bitcoin prices go up again the following weekend, reversing the week’s downward trend. The crypto market is now mainstream, and institutional investors and significant hedge funds are increasingly moving into it. Bitcoin and other cryptocurrencies are safe havens defying short-term market trends.
