Daily move on bitcoin and how to trade it

Daily move in bitcoin and how to trade it

Some days, the price of bitcoin will trade within a range of 200 USD, while other days, it can move more than 3,000 USD. Have you ever wondered what the average daily move is and how you can utilize it in your daily trading journey?

Does bitcoin in general move more on a Monday than on a Friday? Crypto YouTubers tend to tell you bitcoin does not move much in the weekend as CME is closed – well, is that true? Read on to find out. 

Below is a graph, showing the daily move on BTCUSD in USD since the beginning of 2020. All bars are color-coded according to the different weekdays. 

Overall, the average daily move is 494 USD.

The reason why Thursdays stand out is because of an outlier on March 12th, where BTCUSD moved (dropped) a total of 3,192 USD in value. If we take that out, Thursdays average would be just around the 550 USD mark.

This is measured using the daily high and low, not taking open and close into consideration.

A couple of thoughts on this

  • While the average move on Saturdays is a bit lower than all the other days, Bitcoin still does move quite a bit.
  • Sundays see just as much movement as the other days. So when YouTubers tell you “its weekend, CME is closed so nothing will happen”, you should take that with a grain of salt. 
  • The daily move listed here, tells us how far there is between the highest and the lowest price BTC has traded per day, on average in 2020. This is not necessarily indicative of volatility. A day with a total move of say 400 USD cab be a “quiet” and trending day, but it can also be a highly volatile day, ranging heavily up and down between two narrow anchor points.

Trading application

  • For daytrading, this could (maybe) be applied in a similar manner to what traders often do with the ATR indicator. Using a stop loss of 500 USD or more (adjusted to how much the market moved already) may improve your odds (everything else being equal). 
  • You may avoid potential pitfalls by not entering trades when BTC has moved 400 – 600 USD in one direction within a 24 hour period (unless you plan to trade the opposite direction of that particular move). 
  • If you caught a trade close to the open price, and the price since moved in your favor of close to the daily average, you may consider to take profit.

Are there other ways this can be utilized – probably. I am currently trying to implement this in my daytrading journey with bitcoin. If you have any suggestions to this, I would love to hear your thoughts. Drop a comment below and share your thoughts.

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