Between Midnight and 1 A.M. (UTC) Are the Most Volatile Hours for Bitcoin’s PriceBy Charlie Custer
Cryptocurrencies like Bitcoin are among the most difficult assets to day trade because, unlike traditional stocks, there is no “day.” The Bitcoin market is open all day, every day, and that presents an interesting opportunity to look at how price trends vary over the course of a typical day.
To get a better look at this, we collected data from Crypto Data Download about Coinbase prices over the past two years, from July 6, 2017 to July 2, 2019. We looked at the hourly high and low prices for each hour of each day, and then compared each hour to the other 23 hours of each day. In the chart below, we’ve graphed the number of times each hour had its day’s highest high (pink) and lowest low (blue).
This chart demonstrates a few things.
First, it shows that midnight and 1 a.m. UTC have been, over the past two years, the most volatile hours for Bitcoin’s price. The hour of 1 a.m. UTC, in particular, has more daily highs and more daily lows than any other hour of the day. That suggests that the Bitcoin price has often seen its wildest swings during this hour.
This may be because that hour is the beginning of the evening in North America and the beginning of the workday in Asia. It’s one of the times of day when Western and Asian traders are most likely to be active simultaneously. Asia’s traders may be waking up and reacting to the news of the day, and North American traders are still awake to react to the reaction of the Asian markets.
Second, the chart also demonstrates that, as much as investors might like to find one, there is no “right” time of day to buy Bitcoin. Over the last two years, one would have been slightly more likely to hit a daily low than a daily high when buying during the morning hours (3 a.m. to noon UTC), but the differences are small enough that it would be unwise to extrapolate them as meaningful for any given day’s trading.
Given that, perhaps this chart is proof of the old investor’s adage that time in the market is better than timing the market. Timing Bitcoin to buy at the daily low and sell at the daily high would be a challenge, but someone who bought BTC two years ago and simply held it would have enjoyed a 3X return on their investment.