Why does bitcoin price go down on the weekends?

Matthew Light

Active Member
Dec 25, 2015
134
121
Several people have noted that Bitcoin price tends to go down on the weekend and up during the week. That seems to fit with my own very small observational data set. Assuming that this is correct, I have a theory as to why:

1) New coin production occurs continuously on a more-or-less constant rate of 150 bitcoins per hour until the next halvening when it will be reduced to 75 bitcoins per hour. I suspect this is the primary source of bitcoins for new investor demand, except during rapid price surges.

2) Most mined bitcoins are sold for fiat at / near the time of their eligibility, in order to cover mining costs (electricity, salaries, ASICs etc.)

3) Most Bitcoin investment buyers (HODLers) purchase during the week and spend time with family, chores etc. on the weekend. The absence of buying demand from those HODLers on weekends can lead to a price drop as mined coins are continuously dropped onto the market.

4) Savvy traders are probably already aware of these patterns and use them to hoard / dishoard, helping to balance out supply and demand and dampening this pattern.



As an additional hypothesis, I bet that:

1) Price tends to increase on weekday mornings of the biggest Bitcoin buyers markets as many people make a decision to buy Bitcoin as an investment in the morning and execute their buys then. I have noticed a big spike in price that happens regularly in the evening here (morning for Chinese buyers).


In an ideal world these kinds of patterns would be arbitraged away. However the bitcoin to fiat marketplace is very imperfect as many are (quite justifiably!) unwilling to keep much bitcoin / fiat on the exchanges, and successfully trading on the exchanges does not mean that you will walk away with those winnings in the medium / long-term as BTC or even fiat balances outside of the exchange.

Now I just have to spend some time gathering exchange price data and see if they fit my casual observations. As for trading them - I'll leave that to others. My own bitcoins leave Coinbase as soon as they are eligible!
 

Matthew Light

Active Member
Dec 25, 2015
134
121
I'll have to figure out how to get a dataset, define "weekends" in a world clock, and then do some number crunching and post the results.
 

Matthew Light

Active Member
Dec 25, 2015
134
121
Thanks for posting that. Looks like someone else has seen at least some evidence of a difference in weekend trading, specifically Sundays, and weekday trading, specifically Wednesdays.
 

peernode

New Member
Jan 1, 2016
1
0
I noticed this a few months ago and downloaded some price data to test the significance. I didn't save or plot anything; I just used ipython to get some p-values. It is real. I don't know if it's profitable enough to overcome costs.

The reason, I believe, is that banks are closed at the weekends and so you can't send money to an exchange via a bank and buy bitcoins at the weekend. You can very easily send bitcoins to an exchange and sell them, but you can't buy, unless you've left dollars on the exchange from earlier in the week.

When bitcoin buyers send fiat to the exchange, it mostly arrives early in the week, with more fiat transfers arriving on Monday and Tuesday than Thursday or Friday. That means you tend to see higher prices on Tuesday/Wednesday and lower prices at the weekend.
 

Matthew Light

Active Member
Dec 25, 2015
134
121
peernode said:
The reason, I believe, is that banks are closed at the weekends and so you can't send money to an exchange via a bank and buy bitcoins at the weekend.
It's an interesting suggestion. Perhaps this is the case at some or most of the exchanges. I have no problem issuing buy orders on the weekend at Coinbase, however.
 

Deep Sea

New Member
Mar 13, 2018
1
0
No, Bitcoin or any other crypto prices don’t go down on weekends or any public holidays. Bitcoin is the first most popular digital crypto-currency whose price is influenced by a wide range of factors. Ideally, the bitcoin price is normally expressed as the exchange rate of the bitcoin in relation to other currencies. With an upsurge in the adoption and usage of this digital currency, the demand for bitcoins has significantly increased in the recent past. Below are some of the main factors that can influence the bitcoin price:

1. Government Regulation
Each time a government releases official statements about the regulation of digital currencies, the price of bitcoin is normally affected. Even if the actions of that government are not related to the virtual currencies directly, the impact will still be felt. A good example of this can be derived from the Cyprus banking crisis, where the government seized funds. This prompted discussions on whether Cyprus should adopt Bitcoins as their new currency.

2. Media Influence
The media can also influence the bitcoin price significantly. Media hype can easily lead to an increase in the price, while negative news can lead to a decline in the price. For instance, news about bankruptcy or hacks on bitcoin-related websites and services can cause panic and disruption among bitcoin users, leading to price dips.

3. Stability of the Bitcoin Network
Stability of the bitcoin network is a major factor that most bitcoin enthusiasts are concerned about. Most people want a secure network where they will not lose their money. Unlike the conventional currencies like euros and dollars, bitcoins are largely perceived as economic bubbles as they are only valuable when exchanged with other currencies, but do not have any inherent value on their own. If most people and business organizations stopped accepting bitcoins, the “bubble” would burst, leading to a fall in the bitcoin price.

4. The Bitcoin Demand and Supply
The price of bitcoins is largely depended on the demand and supply. This means that high demand and low supply often leads to an increase in the price. Note that bitcoins have a controlled supply whereby the total number of bitcoins in circulation must never be more than 21 million. Due to the limited supply, there are speculations that the bitcoin price will continue to rise with time.

5. Wider Mainstream Acceptance
This is another major factor that influences the price of this crypto-currency significantly. Even if it has faced a number of challenges and detractors, many well-known companies and businesses have started accepting bitcoins as a means of transaction.

6. Large Businesses Dumping to Fiat Currency
Given that bitcoins are not widely accepted as a means of transactions or payment, not many people and institutions can accept them. Because most things still have to be paid for in fiat currencies, many businesses often sell large portions of bitcoins so as to pay for their business expenses.
 

Bitterom

Member
Jan 20, 2018
59
8
I dont think the price goes down on the weekends. This is a money market with decentralized behavior so there is no weekend on this market. Every new day is a new experience on the crypto market. The market is developing to grow mature and it will achieve the milestones sooner rather than later.
 

Toros

Banned
Dec 17, 2017
100
13
Hello Matthew Light. This is a very fascinating data you have observed. Many people are still unable to understand the basics of cryptocurrency and you are analyzing such data. I do not know the reason of this occurence. Maybe the members can help you.
 

Zolin

Banned
Nov 26, 2017
63
7
I don't have any evidence to say about the matter. It maybe a case of coincidence. The market becomes slow at the weekends. Why do you think this happens? Maybe the people become sluggish at the weekends. Post your answers, please.
 

Toros

Banned
Dec 17, 2017
100
13
It might just be a coincidence. I think that the market becomes slow on the weekend. People are happy to see the weekends out. There is a lot of trading on the weekdays. There can't be fix reason for this. What do you think is the best reason for it?
 

Bartab

Banned
Sep 17, 2017
11
0
1) New coin production occurs continuously on a more-or-less constant rate of 150 bitcoins per hour until the next halvening when it will be reduced to 75 bitcoins per hour. I suspect this is the primary source of bitcoins for new investor demand, except during rapid price surges.

2) Most mined bitcoins are sold for fiat at / near the time of their eligibility, in order to cover mining costs (electricity, salaries, ASICs etc.)

3) Most Bitcoin investment buyers (HODLers) purchase during the week and spend time with family, chores etc. on the weekend. The absence of buying demand from those HODLers on weekends can lead to a price drop as mined coins are continuously dropped onto the market.

4) Savvy traders are probably already aware of these patterns and use them to hoard / dishoard, helping to balance out supply and demand and dampening this pattern.



As an additional hypothesis, I bet that:


1) Price tends to increase on weekday mornings of the biggest Bitcoin buyers markets as many people make a decision to buy Bitcoin as an investment in the morning and execute their buys then. I have noticed a big spike in price that happens regularly in the evening here (morning for Chinese buyers).
I don't think it does tbh, people notice patterns where there aren't any.