How do financial market holidays impact the volatility of cryptocurrencies?

3 answers

• Ahmed ElboosFeb 19, 2025 · 5 months ago
  During financial market holidays, the trading volume of cryptocurrencies tends to decrease. This lower trading activity can lead to increased price volatility as there are fewer participants in the market. Traders who remain active during holidays may take advantage of the thinner liquidity to manipulate prices, resulting in larger price swings. Additionally, the absence of institutional investors and market makers during holidays can amplify the impact of retail investors on the market, further contributing to increased volatility.
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• Parth SarthyFeb 17, 2023 · 2 years ago
  Financial market holidays have a mixed impact on the volatility of cryptocurrencies. While the reduced trading volume can lead to increased volatility, the absence of institutional investors and market makers can also result in decreased volatility. Without the presence of these large players, the market may become less efficient and more susceptible to price manipulation. Overall, the impact of holidays on cryptocurrency volatility depends on various factors such as the overall market sentiment and the level of retail investor participation.
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• Cephas GondweSep 18, 2021 · 4 years ago
  At BYDFi, we have observed that financial market holidays generally lead to increased volatility in cryptocurrencies. The reduced trading volume during holidays creates an environment where even small buy or sell orders can have a significant impact on prices. This increased sensitivity to market orders can result in larger price swings and higher volatility. It is important for traders to be aware of these dynamics and adjust their strategies accordingly during holiday periods.
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