Bitcoin trading is now a top needed skill in financial settings. Knowing the right time to place a buy or sell bid is important in making profits as a crypto trader. Also, having knowledge of technical analysis isn’t a bad idea as well. Before now, financial investment did not include cryptocurrencies. But now that they do, everyone wants to know the best time of the day to buy Bitcoin.
Since you have also decided to diversify your investment into Bitcoin (see our opinion on the top 10 undervalued cryptocurrencies), you are practically buying currency like the pounds and Euro. However, there are some particular strategies one has to adopt before you can invest in cryptocurrencies such as Bitcoin. To make profits, you need to know the best time of the day to buy Bitcoin and that is what this article is all about.
Best Time to Buy Bitcoin According to Economic Analyst:
Economic experts from the prestigious Yale University have come up with a method to foretell the price of bitcoin according to BTC’s past patterns and behavior. Yukun Liu and Aleh Tsyvinski examined seven years of BTC monetary value to figure out which predictor can be used to ascertain the approaching price of BTC.
Their discovery, published in the National Bureau of Economic Research, proves that cryptocurrency is totally different from shares, stocks, currencies and other monetary commodities in regards to elements affecting their market progress
“In contrast, we show that the cryptocurrency returns can be predicted by factors which are specific to cryptocurrency markets,” the report noted.
“Specifically, we determine that there is a strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns.”
According to their method of prediction, a buyer should only invest if the value of BTC increases more than 20% in the previous week. Because, if Bitcoin is doing well it tends to be for the short term. Although they have not provided the answer to the question, most traders would ask, “should I buy bitcoin when it’s low?” As most traders would like to buy when it is low.
What Day of the Week is Best to Buy Bitcoin?
For an investor to ascertain the best day of the week to buy bitcoin he or she needs to study the movement of Bitcoin using site such as coinmarketcap, so as to evaluate the exact day of the week from each line and then compute the price of BTC for each day of the week using trend dependant movement (TDM).
So let’s say a trader asks does bitcoin goes up on weekends? He can only find out by analyzing the historical data of the bitcoin market. One way of doing that is by using “trend dependant price movement.” Usually, the price of bitcoins is the lowest on Friday and the highest on Monday during downward trends. In an upswing situation, Bitcoin is the highest on Saturday and usually the lowest on Monday. So, if you want to buy bitcoin and you don’t know the best day of the week, use the TDM analysis. So, you can either buy at the beginning of the week during an uptrend or sell at the end of the week during the downturn because chances are high you will get the best price.
What Time Of The Day Is Best To Buy Bitcoin?
It is difficult to answer what the best time is to buy bitcoins, but we can try. Due to the volatile nature of cryptocurrency; which means that the price can increase drastically in value and also fall in value within a short period of time. It is advised to use crypto alert tools so as to set a notification on the price movement. This will help you get the best price to buy bitcoins. Also, the best time of the day to buy bitcoin is also the best time of day to sell bitcoin. This is because if you are buying, then someone is selling!
As an investor, your focus should be on long term price performance rather than the usual short term mindset. This is unhealthy for both you and your investment in general. Crypto adopters do not care mostly about short term gains, and anyone who wants to go into bitcoin investment should do likewise. Bitcoin should not be viewed with a get rich quick scheme mindset.
Should I Buy Bitcoin When It’s Low?
The marvelous principle most investors follow before investing in bitcoin is: buy low, sell high or never sell. The ideal entry point in bitcoin is to buy low and for you to do that, you need to understand the concept of shorting.
“Shorting is a term used in financial trading to describe the process of opening a position that becomes profitable as the price of the underlying asset decreases, with the total profitability of the trade being proportionate to the size of the decrease in price.”
So, when an investor expects the price of a commodity or assets to step up, they buy and sell for a profit when the current price is higher than the purchase price. But for you to be able to distinguish your entry and exit direction you need to have an understanding of technical analysis.
How Technical Analysis Can Help You Determine When To Buy Bitcoin
Technical analysis is highly used in the aspect of trading and also for making a profound investment decision. By understanding TA, you can better understand bitcoin uptrend and downtrend signals which will make you a better decision-maker when it comes to trading bitcoin. For example, you can buy bitcoins when the price hits solid support or sell when the price hits a resistance level.
According to Investopedia “A support, refers to the price level that an asset does not fall below for period of time while a resistance level, is the price point at which the rise in the price of an asset is halted by the emergence of a growing number of sellers who wish to sell at that price.”
Don’t get it twisted, even with enough technical analysis, you won’t find an immaculate entry and exit point. The significant way is to be smart and adhere to the plan you lay out before trading. (always have a layout plan before trading. For example, you want to buy bitcoin at $8,000 and sell at $9,000)You can buy bitcoin when it is moving upwards, sell at profit and it will still continue to go up even after you have sold out. That is fine-you have already made your profit. Don’t be greedy, move on.
Trading Indicators are another great tool that can help to find entry and exit points. We have several tools that investors and traders can use from the Fibonacci indicator, pivot points, and various other arithmetical indicators.
Should I Sell High?
Generally speaking, it is easier to know when to buy than to sell. Every investor must have a clear exit point. You will have to use that exit point to determine when to close a trade to gain and also know when your investment has gone wrong. The challenging part is how to determine these levels for every trade. At the beginning of every trade, you ought to know your targets regardless of the direction. The simple rule is not to be greedy.
Should I Just “HODL”?
The school of thought in crypto trading and investment is to only buy as much as you can afford to lose entirely. That should be your number one consideration before investing in any crypto asset.
Notwithstanding, holding Bitcoin for the long term is the best strategy because bitcoin is an asset; it is better to accumulate bitcoin and hold long term than to amass fiat profits that will end up valueless.
From all the theories on when is the best time of the day to buy Bitcoin, we can see that there is no such thing as a perfect market in the real world. Manipulation, human behavior, and the news can affect the price of bitcoin.
Unlike other financial assets like stocks, mutual funds, and fiat, bitcoin is highly volatile, much more than the conventional investment. You can make quick money in a day and lose everything the next day. I will encourage you to research deeply before buying bitcoin and make sure you invest what you can afford to lose. In the end, we hope that you can make decisions based on what is the best time of day to buy Bitcoin.
Rebecca is a blockchain and cryptocurrency journalist fascinated with sharing the knowledge of this technology in the simplest language possible. Rebecca is also a featured contributor for Coinfomania & Coingeek.