Since the inception of new mobile and web services, it’s very easy to purchase cryptocurrencies in a few minutes from anywhere across the world. Now, buying a Bitcoin is not a headache anymore. But, if you are planning to buy Bitcoin, obviously you might get confused that what is the best time to buy Bitcoin?
Although nowadays purchasing Bitcoin has become easy most of the providers offer very high rates and commission.
Best Time To Buy Bitcoin
In 2020, due to the Covid-19 pandemic crises, the financial and economic state around the world has been drastically affected. Since March, the price of Bitcoin has dropped to USD 4,000. As the rate of Bitcoin differs from year to year, from time to time, you may end up purchasing the cryptocurrencies at the wrong time and most likely end in a huge loss.
Not many people in the BTC (Bitcoin) industry have fair financial knowledge. what is the best time to buy Bitcoin? Buying Bitcoin still remains in dark, especially for the new investors. Face the fact, professional players of the cryptocurrency industry are well versed with how the industry works.
Due to the Bitcoin industries’ high volatility, even the Bitcoin experts couldn’t find the best time for purchasing Bitcoin. According to the recent students conducted by Bitcoin expert the best time to buy Bitcoin still remains in the dark for some Bitcoin traders. Most of the Bitcoin holders are self-taught and the new Bitcoin holders borrow knowledge from the traditional financial sector.
Yukun Liu and Aleh Tsyvinski, these two economists have developed a model that predicts the price of Bitcoins (BTC’s). Also, Yale University having prestigious academics has developed a technique on the past price action to predict the BTC’s price.
Additionally, Economists have analysed to weigh on the best time to buy Bitcoin on the basis of several factors and observations. Their observation showed that cryptocurrencies differ from traditional financial assets for determining the factors of price swings.
Unlike stocks and commodities, economists proved that Bitcoin heavily relies on momentum. If you feel that your Bitcoin is performing well, but it may change drastically after a short term. According to the research, the potential investors should purchase the leading cryptocurrency if the value of Bitcoin is expected to increase by more than 20 percent in a week.
Best Day Of Week To Buy Bitcoin
The market of cryptocurrency is open 224/7, unlike the traditional stock markets which only operate for a few hours of the day in a week. Hence, you can purchase, sell, trade, and exchange the leading digital currencies anytime and everywhere. All you need an internet connection.
According to the research work of many economists, the best days to buy Bitcoin are Sunday and Monday. The result is based on the multiple analyses on average Bitcoin prices on a daily basis. As per their theory, the prices tend to be at the very lowest during Monday and Sundays. The experts suggest that there are certain parameters to keep in mind before buying cryptocurrencies.
Weekend Volume Slow Down
The trading volume at Bitcoin exchanges tends to drop off during the weekend due to the reason for traditional markets being closed. The Bitcoin market becomes vulnerable as there are fewer active traders in the market and becomes more volatile price action.
Mondays Volume Spike
During the weekend, due to low Bitcoin trading volume Bitcoin tends to see sudden pullbacks. For example, Binance recorded a daily volume of 40,000 Bitcoin and 65,000 Bitcoin respectively on the weekdays July 25, 2020, and July 26, 2020. However, the volume of Bitcoins abruptly surged to 150,000 BTC. Eventually, the price of Bitcoin rose to 11%.
|Bitcoin Price Return Over in 2019|
|Monday||0.9 %||0.6 %||0.6 %||0.5 %||0.9 %||1.6 %||2.2 %|
|Tuesday||0.5 %||0.2 %||0.0 %||0.1 %||0.0 %||0.4 %||-0.2 %|
|Wednesday||0.3 %||0.3%||0.4 %||0.5 %||0.3 %||1.0 %||1.2 %|
|Thursday||0.1 %||0.1 %||-0.3 %||– 0.6 %||-0.4 %||-0.1 %||-0.4 %|
|Friday||0.4 %||0.4 %||0.6 %||0.7 %||0.5 %||0.1 %||-0.5 %|
|Saturday||0.2 %||0.4 %||0.3 %||0.1 %||-0.2 %||-0.2 %||0.5 %|
|Sunday||0.0 %||0.0 %||-0.2 %||-0.1 %||-0.4 %||-1.2 %||-1.3 %|
According to the table, Bitcoin exchanges tend to drop off during the weekend and there are significant returns in Bitcoins on Sunday evenings which is shown on the Monday percentage.
Avoiding Pay days Or Buy Bitcoin Before Pay Day
Bitcoin experts are well versed with the fact that Bitcoin purchasers shall avoid purchasing cryptocurrencies during the time of monthly salary payment of the employees. Well, the reason is very obvious, people having a lot of money to invest in the cryptocurrencies which eventually leads to the increment of Bitcoin demand.
Additionally, the price of Bitcoin also increases. So experts say to avoid buying Bitcoins during the middle and end of the month when most of the salaries are being paid.
Dollar Cost Averaging
An investment strategy where an investor divides the total investment amount across the periodic purchases of the target asset in effect to minimize the volatility’s impact on the overall purchases is known as Dollar Cost Averaging (DCA). The DCA tool is used by many investors to build savings and wealth over a long period of time.
In common terms, Dollar Cost Averaging is known as a constant dollar plan. Regardless of the asset’s price at regular intervals, these purchases can be done. As a result, to make the order purchases of equities at the best prices, DCA removes the hectic detailed work of attempting to time the market.
Investing a fixed amount of USD into the Bitcoins on a regular interval is called Bitcoin Dollar Cost Averaging. An example of Dollar Cost Averaging is that if you are buying USD 10 every week. Many Bitcoin experts use this strategy who are in search of buying cryptocurrencies for the long-term. It potentially allocates all the capital of investors during the price peak.
Advantages of Bitcoin Dollar Cost Averaging
Bitcoin DCA reduces the risk of buying tops. The concept behind the Dollar Cost Averaging is splitting the desired amount to be invested into several smaller purchases which are made on a regular basis, mostly during the price peak.
Secondly, Bitcoin Dollar Cost Averaging doesn’t require a big up-front investment as you have to purchase a small or constraint amount of Bitcoins at regular intervals. Eventually, you don’t have to invest a large amount of capital in a day. Also, it reduces the mental stress of buying these digital currencies and also provides time to understand the Bitcoin theory.
Political changes affect Bitcoin prices on a regular basis. However, it is still not easy to quantify the methods to find out how political instability can affect the financial systems. Due to the uncertainty in the nature of finance, government, and politics interdependently.
Recently, there are many political changes that are taking place in various parts of the world. All the more reason for Covid-19 which lead to significant economic changes. In 2020, the media headlines have been filled up with the prediction of a Global Economic Recession.
An impeachment trial in the United States Brexit in the UK protests in Hong Kong, India, Iraq, trade war, and economic crises worldwide.
Effects of Political Instability
Due to the emergence of a new digital concept, or relatively cryptocurrency is a new phenomenon, hence the effect of political events on the Bitcoins has not been deliberated. Many experts and analysts are finding ways to find out what effects the political upheaval has on cryptocurrency?
Since Bitcoins are affected based on your locality, hence, it is either risk-on or risk-off assets. However, Bitcoin is considered a safe place when it comes to the event of political instability. Mostly when the fiat currency is losing its value swiftly.
Countries like Zimbabwe or Venezuela are enduring economic crises which are leading to the popularity of cryptocurrency and hence the price of Bitcoin is increasing. Hence proved that this is an easy option for protecting assets.
The vulnerability of financial systems due to political instability generally leads to a decrease in the value of state currencies. Such conditions provide an alternative currency to gain popularity. Additionally, the investors give preference to assets that are not controlled by a single party. There is a huge loss of confidence in the governing bodies during the time of political uncertainty.
Bitcoin preferably be an interesting way to experiment with digital cash online. But during economic instability or commonly known as a financial storm, Bitcoin investment needs serious considering.
Countries tighten their financial thumbscrews during economic crisis which results in imposing capital controls to their people. This will prevent their people from doing any of their basic financial things. For example, they impose restrictions on taking cash out of the bank during the financial turmoil.
An Example of Panic Buying From History
Financial crises over the world have been correlated with the spike in Bitcoin prices. The price of Bitcoins reached high records in April 2013 when Cypruswas amidst its banking crisis. Additionally, in 2017, the prices of Bitcoin had spiked to even much high rates.
Recently, after Argentina suffered from its own financial difficulties, Government in Argentina had restricted its citizens to buy United States dollars. Hence, the population of the country flees to Bitcoin due to the government imposing capital controls.
In other words, One of the expert’s report from London School of Economics mentioned that Argentina had even become a leader in the Bitcoin Market Potential Index (BMPI) after imposing capital controls.
Drawbacks Of Economic Stability
There are potential drawbacks in the favour of digital currency having no supervision from government. According to the 2018 regulatory concerns, the Bitcoin price has been violated extremely. Since the virtual currencies and Bitcoins are not under the assurance of system or government, it has many drawbacks. So people might experience difficulty in recovering the funds if lost.
Without the government’s regulation, it becomes very difficult to enforce critical regulations, or to raise revenue, and also difficult to tax. The blockchain secures Bitcoin privacy as it records Bitcoins ownership, as a result, prevents hampering by any other individual.
Buy The Dip Gradually
The generic meaning of this term “Buy the Dip” is to buy Bitcoins on average as it falls down or you can buy the assets once the price in the market settles. Moreover, it doesn’t mean to go all-in while the price of Bitcoin is going done.
In general trend of Bitcoin prices is up or sideways in the stagnant market or bull market, hence, the strategy “Buy the Dip” is much safer to use.
Ways To “Buy The Dip” Gradually
You must create an average position or buy incrementally as the Bitcoin price falls down. Your main aim is to buy more as a further decrement in the crypto prices.
The best way is to wait till the Bitcoin price settles down or show signs of recovery. It is very advantageous to Buy Bitcoins at that time.
A good strategy is to buy set orders at lower prices and wait till they get filled. A beneficial strategy is to set buys before the psychological levels, large buy walls, or historic support levels. The reason is that the Bitcoin prices tend to do at least a quick bounce off these levels.
Tips and Tricks To “Buy The Dip” Gradually
In the end, there are numerous ways to buy the dip in Bitcoin prices gradually. However, below are some points that a Bitcoin investor shall keep in mind.
- You must know that the overreaching trend is bearable or not.
- Understand why the sudden dip in Bitcoin prices happened.
- You shall use a proper exchange broker for buying the dip for example Coinbase Pro.
- Remain super careful during the price spiking all over the places.
- Use a conservative strategy until the Bitcoin price starts going back or settles down.
- Shall be careful when buying or sell.
- Don’t pay for dubious crypto trading signals
what is the best time to buy Bitcoin? Now. what is the second best time to buy Bitcoin? Yesterday. Just kidding, read below.
Best Time To Trade Bitcoin
The trend of trading Bitcoins is changing in 2020. Many Bitcoin Investors and crypto traders are eventually changing their trading procedures preferring to trade around the American trading session. Due to the high price volatility that occurs during the beginning of New York Stock Market Trading time i.e. 2:30 pm US local time.
The official data showed that the opening of American financial markets (stock markets) is highly correlated to the Bitcoin price volatility for the world’s flagship currency by market capitalization. Additionally, there has been considered a little impact on the crypto price volatility in the trading sessions in London and Asian financial market openings.
24/7 Bitcoin Trading
Bitcoin trading is open 24/7 as long as the internet works and the blockchain is functional without any major 51% attack or any such bad things which has never happened so far.
Best Time To Trade
When the market is the most active is the best time to trade Bitcoin. It is very difficult to predict the best time for trading Bitcoins due to the impact of socio-political events and day-to day news on the trading volume.
In addition, according to IG report about Crypto Trading Volume in July 2020, the most liquidity is around the opening and closing of traditional stock European Market. The European market opens at 8: 00 am and closes at 5: 00 pm.
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Final Verdict – What Is The Best Time To Buy Bitcoin?
- The economists has developed a model that predicts the price of Bitcoins (BTC’s). Economists has analysed to weigh on the what is the best time to buy Bitcoin on the basis of several factors and observations
- The potential investors should purchase the leading cryptocurrency if the value of Bitcoin is expected to increase by more than 20 percent in a week.
- So, the best days to buy Bitcoin is Sunday and Monday as per the research work of the economists.
- The Bitcoin market becomes vulnerable during the weekend as there are fewer active traders in the market
- There is a significant return in Bitcoins on Sunday evenings. The best time to Invest in the Bitcoins is during the Sunday evenings.
- Avoid buying Bitcoins during the middle and end of the month when most of the salaries are being paid
- Dollar Cost Averaging is splitting the desired amount to be invested into several smaller purchases which are made on a regular basis.
- Political changes affect the Bitcoin prices on a regular basis. However, Bitcoin is considered as a safe place when it comes to the event of political instability
- Due to vulnerability of financial systems due to political instability that generally leads to a decrease in the value of state currencies and affecting the Bitcoin prices.
- “Buy the Dip” means buy Bitcoins in average as it falls down or you can buy the assets once the price in the market settles
- The most liquidity for the Bitcoin trades is around the opening and closing of traditional Stock Market of each country.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates