Crypto · Intermediate · 4 min

24/7 trading and volatility

You can explain how round-the-clock trading changes crypto markets, why crypto prices swing so much, and what that means for position size.

No closing bell

Stock exchanges open in the morning, close in the afternoon and rest at weekends. You can switch off. Crypto markets never stop. Prices move at three in the morning, on Sundays and on Christmas Day.

That changes how these markets behave and how they feel to trade. Combined with crypto's large price swings, it is one of the main reasons many beginners lose more than they planned. This lesson explains both effects.

24/7, thin at night

Round the clock. Crypto platforms run 24 hours a day, every day. There is no opening auction and no overnight gap in the classic sense. But activity is not even: liquidity follows the working hours of Asia, Europe and America, and thins out at night and at weekends. Thinner order books mean that large orders and news can move prices more, as the lessons on order books showed.

Large swings. Crypto prices move far more than those of large stocks. The SEC describes bitcoin and ether as highly speculative and volatile, and notes that speculation can make volatility worse. Several factors add up:

There are no earnings or dividends to anchor prices, so sentiment dominates.
Much trading uses leverage, which forces sales when prices fall and accelerates moves, as the lesson on perpetual futures explains.
Many coins are small and thinly traded.

Drawdowns. A drawdown is the fall from a previous peak to a later low. Large drawdowns are part of crypto's history: bitcoin has lost more than half its value several times, and many smaller coins have fallen over 90% and never recovered.

The mathematics of losses is harsh. A fall of 50% needs a rise of 100% to recover. A fall of 80% needs 400%.

What follows for you: position size matters more than entry timing. A position that can fall 70% must be small enough that such a fall does not break your plan.

−80% needs +400%

A fictional coin trades at 100 at its peak.

Over a year, it falls to 20, a drawdown of 80%.
To get back to 100, it must rise by 80, which is 400% of 20.
An investor who put half of their savings in at the peak lost 40% of their total savings.

Another investor who limited crypto to 5% of their savings lost 4% of the total in the same fall. Same coin, same timing, very different consequences.

Common mistakes

Watching prices all night. 24/7 markets reward a plan, not constant screen time.
Sizing crypto like a large stock. Its swings are far larger.
Ignoring weekend liquidity. Thin books make prices jumpy.
Expecting every drawdown to recover. Many coins never do.

The takeaway

Crypto trades every hour of every day, with no closing bell. Prices can swing more in a weekend than many stocks in a year, so size positions small.

Check yourself

Quick quiz

4 questions. Instant feedback, nothing is saved.

1Tap the market that keeps trading on Saturday night.

Tap the chart.

Crypto platforms trade around the clock, including weekends and holidays.
2What is a drawdown?

A drawdown of 70% means the price fell to 30% of its earlier high.
3A coin falls 80% from its peak. How much must it rise to get back to the peak?

From 20 back to 100 is a rise of 80, which is 400% of 20.
4Why can weekend prices in crypto be especially jumpy?

Thin books mean large orders move prices more, as covered in the lessons on order books.

of 4 correct.