With so much interest directed towards cryptocurrencies thanks to the rise of digital assets, both blockchain veterans and industry newbies have noticed a trend in the price dynamics of the market. As Fortune explained earlier this year, cryptos crash on the weekends. Is it then possible to use this information to profit from trading? Cardano (CCC:ADA-USD)?
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As a general rule, it is certainly possible to use alternative cryptos like ADA depending on how they are historically traded on certain days of the week. But you have to do your due diligence.
When blockchain experts and analysts state that cryptos tend to become volatile on the weekends, they usually talk about it Bitcoin (CCC:BTC-USD). Despite the derogatory, they are all the same junk criticism, BTC is not Cardano.
In fact, after dousing the data, just because Bitcoin and other cryptos ping historically weak returns on the weekends, can’t assume the same is true for ADA. In both bullish and bearish cycles, the weekend has proven to be either the best or one of the best times to stay in Cardano long.
To explain the widespread prevalence of stories about the apparent weekend weakness of cryptos, Investing.com explains that the same trade sizes can move prices much more than usual as fewer trades occur outside of the business week. A few administrative considerations were also noted:
The banks are closed over the weekend, so investors can no longer deposit money into their accounts. This is a problem for investors who trade cryptocurrency Exchange Traded Funds (ETFs). You are trapped when the price falls over the weekend and cannot make a profit when the prices rise over the weekend.
The difference, however, is that Bitcoin has found mainstream acceptance hence its heavy trading during the regular week. On the other hand, Cardano remains the “people’s cryptocurrency”.
Cardano is a ‘blue collar’ crypto
Unlike Bitcoin, which has become synonymous with virtual currencies and blockchain technology in general, Cardano is more of a marginal asset. Yes, I am aware that at the time of writing, ADA is ranked third in terms of market capitalization.
But let’s be honest too. Cryptos are one of the wildest asset classes out there. Cardano could finish third today and barely stay in the top 30 tomorrow. For this reason, when viewers decide to participate in cryptos, often prefer the established history of Bitcoin rather than the more speculative altcoin category.
However, this fact also leads to different trading behavior between Bitcoin and emerging altcoins. Based on historical daily returns going back to October 2017, ADA’s average performance by calendar days looks like this:
- Monday: 0.30%
- Tuesday: 0.78%
- Wednesday: 0.39%
- Thursday: -0.03%
- Friday: 0.92%
- Saturday: 1.62%
- Sunday: 0.22%
As you can see, the average return on Fridays and Saturdays is 1.27%, while the average return including Sunday is 0.92%. In any case, it far exceeds the 0.36% Monday through Thursday average return.
In addition, Thursday has been the only day so far that has brought negative returns on average. In fact, broken down by year, Thursday is the weakest or one of the weakest days to hold Cardano. However, you can certainly use this knowledge to your advantage if you want to trade cryptos on a daily basis.
If you need to buy Cardano, do it on a Thursday.
It’s not entirely clear what makes Thursday such a straggler. But in my opinion, the weekend boom starting Friday is understandable – Cardano is basically a worker crypto. It’s the normal people with nine-to-five jobs who buy ADA.
Since worker bees tend to recover over the weekend, the purchase is made while it wears off for the white-collar bitcoin.
Monday blues for 2021
While the hard data shows that Thursday is an underperformer for Cardano, Monday has become a non-achiever for the year to date, generating an average daily return of -0.13%.
It’s a notable transition from 2020, when Monday was the top performing day, responsible for 1.2% average returns.
What gives? I think this points back to my blue collar cryptothesis. Last year, the pandemic forced millions of workers to work remotely. So the Monday morning blues was no longer an issue. But in 2021, as companies keep calling their employees back, those blues have returned as well.
To me, this is further proof that Cardano is the people’s cryptocurrency. So when trading, you should know that ADA is much more focused on the worker fundamentals than the discerning private investor in Bitcoin.
At the time of publication, Josh Enomoto held a LONG position in ADA and BTC. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
As a former senior business analyst for Sony Electronics, Josh helped Enomoto broker key contracts with Fortune Global 500 companies. Over the past several years, he has provided unique, critical insights into the investment markets as well as various other industries including law, construction management, and healthcare.