TLDR: First reason is due to lower volume, which brings about higher volatility.
Second reason is that traditional institutions are closed, which leads to lower buying pressure.
Conclusion: Weekends are a good time to buy the dip!
First, the weekend typically records a lower volume, which raises the chances of high volatility.
Second, traditional markets that facilitate Bitcoin trades, like CME, close during weekends. As they open, it could cause a spike in volatility.
During the weekend, as traditional markets close, trading volume at Bitcoin exchanges also tends to drop off. When there are fewer active traders in the market, it leaves the market vulnerable to more volatile price action.
The CME Bitcoin futures market and its closure during the weekend could also be impacting Bitcoin’s strong performances on Mondays. Similar to the U.S. stock market, CME closes its markets over the weekend and on national holidays.
Accredited and institutional investors that use the CME Bitcoin futures market have to wait until the market opens on Monday.
Unlike traditional assets, BTC is traded through the weekend and holidays on exchanges. Hence, when CME closes and opens on a Monday, there is usually a gap in price.
The CME gap fill is a theory that is widely recognized within the cryptocurrency market. Data shows that the Bitcoin exchange market usually moves to fill the gap between CME and the rest of the market. Consequently, following a weekend, Bitcoin often sees a major price action.
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