What Makes Crypto Markets Unique?
1. 24/7/365 Trading
Unlike traditional stock markets, which open and close at set times and shut down on weekends and holidays, crypto markets never sleep. Trading is continuous—day, night, or public holiday, the market is always moving.
“Crypto trading is 24 hours for 365 days a year, that’s 8,670 hours. That’s roughly 5.8x more trading hours than stocks…”
Traditional stocks trade about 1,500 hours per year. Crypto is always ON.
Implications for Traders:
- Opportunities (and risks) can appear anytime.
- Sudden moves may happen while you’re sleeping—manage risk accordingly.
- Automated tools (see previous chapter) help manage round-the-clock action.
2. High Volatility: Double-Edged Sword
Crypto prices are famously volatile; it’s normal for coins to swing 10% or more in a single day. Huge gains attract headlines and FOMO, but steep drops are just as common.
“It can drop 50–90% on [delisting] announcement. Sure, Bitcoin and Ethereum might be ‘too big to fail,’ but can still expect huge swings.”
Risk Management Reminders:
- Always use stop-losses or plan your exits before entering a trade.
- Start small and never risk more than you can afford to lose—a rapid crash is always possible.
3. The Role of Market Cycles
Crypto is known for boom and bust cycles—periods of wild growth (“bull runs”), followed by long, stagnant declines (“crypto winters”).
Watch for:
- Halving events (e.g., Bitcoin): Supply decreases trigger new bull runs.
- External catalysts: ETF approvals, regulation, or big company involvement can drive powerful moves.
“Bitcoin halving will be in around April 2024; all previous halvings pushed BTC price much higher than previous peaks, but how many of you will act now?”
4. Comparing Crypto and Traditional Markets
- Young and Unpredictable: Crypto markets are reminiscent of the early years of stock trading.
- People Still Move the Market: Trading is global and faster, but ultimately driven by human psychology—fear, greed, hope, regret.
“If you look at the charts below, you will see that since 2017 or so, the crypto market is very similar to early years of stock trading up to the 1950s.”
Understanding Crypto Coin Relationships
Correlation and Rotation
- BTC, ETH, and Altcoins: When Bitcoin surges, many altcoins may drop (“money flows” from alts to BTC). When BTC stabilizes, funds often flow back to alts.“Typically, BTC and ETH are kind of related… Likewise for ETH and all the altcoins—when BTC is up, altcoins are down, etc.”
- Stablecoins (USDT/USDC): Used for safety and easy moves between trades.
Market Cap and Dominance
- Market Cap: The total value of a cryptocurrency; gives a sense of scale. BTC’s “dominance” (% of total market cap) is closely watched.
- Dominance Shifts: When BTC dominance falls, it could signal an “altcoin season”—a period when secondary coins outperform BTC.
How News, Regulation, and Social Trends Move the Market
- Regulatory Announcements: Legal changes, such as the US allowing Bitcoin ETFs or China’s ban, frequently cause sharp price reactions.
- Global Events: Economic crises, political news, or tech innovations quickly ripple through prices.
- Social Media & Influencers: Crypto markets are extremely sensitive to tweets, memes, and viral rumors. Stay alert, but don’t trade blindly on hype.
Tools for Market Analysis
- Market Data Sites: CoinMarketCap, CoinGecko for real-time overviews.
- Volume and Order Books: Help spot “whale” activity and liquidity.
- News Aggregators: CoinTelegraph, Binance Academy, and Twitter for the latest news.
Key Takeaways
- Crypto’s 24/7 schedule offers non-stop opportunity—but nonstop risk.
- Be aware of cycles, volatility, and correlations in the market.
- Use reliable sources and develop your own opinion, not just following the herd.
- Plan for sudden moves, and think long term—crypto may be young, but lessons from other markets still apply.
In the next chapter, you’ll learn about the most common mistakes crypto traders make—and how to sidestep them smartly.
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