2023-12-23 03:00:00
During the Christmas and New Year holiday periods, financial markets generally experience a decrease in liquidity and volatility. This trend is likely to affect the dynamics of the cryptocurrency market and that of Bitcoinknown for its volatility in normal times.
Mechanisms of holiday volatility
Financial markets experience a slowdown during the holiday season because many investors are less active during this time. They temporarily turn away from trading operations to focus on celebrations and family concerns.
This leads to a decrease in transactions and, therefore, a reduction in market liquidity and volatility, including that of Bitcoin. You can also observe this volatility by consulting the Bitcoin price live.
Closing times and stock market times
During the Christmas holidays, various international stock exchanges close their doors or reduce their opening hours.
While the cryptocurrency market is open 24/7trading volume is affected by the closure of traditional stock exchanges, which is another factor explaining the drop in volatility during the holidays.
The price of Bitcoin on December 25 of the last 5 years
For those of you who are more curious, for information purposes, here is the price of Bitcoin on December 25 of the previous 5 years:
YearClosing price202216 $831.82202150 $393.82202024 $703.4920197 $225.6220183 $821.03
Tame the volatility during the holidays!
Here are some strategies allowing Bitcoin investors to limit risks and take advantage of the opportunities offered by this holiday season:
- Set up limit and stop-loss orders : Using these tools to manage risk by setting a purchase or sale price in advance will allow you to secure your gains or limit your losses if the market moves unfavorably.
- Adjust investment deadlines : Bitcoin investors may be tempted to look for short-term trading opportunities during this quiet period. However, it is important to adapt to reduced liquidity and volatility conditions by adjusting the length of time open positions are held.
The volatility of the cryptocurrency market may be affected by the slowdown in financial markets during the Christmas period.
However, savvy investors who keep an eye on technological developments, diversify their portfolios and adjust their investment strategy can take advantage of these special circumstances to develop their portfolios and minimize risks.
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