With so much interest directed toward cryptocurrencies thanks to the rise of digital assets, both blockchain veterans and industry newcomers have noticed a trend in the market’s pricing dynamics. As Fortune declared earlier this year, cryptos tend to crash on the weekends. Is it possible, then, to leverage this information for profiting from trading Cardano (CCC:ADA-USD)?
As a general rule, it’s certainly possible to advantage alternative cryptos like ADA based on how they historically trade during particulars days of the week. But you’ve got to perform your due diligence.
When blockchain experts and analysts state that cryptos tend to get volatile over the weekends, they’re usually talking about Bitcoin (CCC:BTC-USD). Despite the pejorative, they’re-all-the-same-junk criticism, BTC is not Cardano.
In fact, after I poured over the data, you cannot make the assumption that just because Bitcoin and other cryptos historically ping weak returns on the weekends that the same applies to ADA. Through both bullish and bearish cycles, the weekend has proven to be either the best or one of the best times to be long Cardano.
To explain the wide proliferation of stories regarding cryptos’ apparent weekend weakness, Investing.com explains that because fewer trades occur outside of the business week, the same trade sizes can move prices much more than usual. Also, it noted some administrative considerations:
Banks are closed over the weekend and so investors are unable to add more money into their accounts. This is a problem for investors who trade in cryptocurrency ETFs (exchange-traded funds). They are trapped if the price falls over the weekend and they are unable to make a profit if prices surge over the weekend.
But the distinction is that Bitcoin has garnered mainstream acceptance, hence its strong trade 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 frontier asset. Yes, I’m well aware that as of the time of writing, ADA is ranked third in terms of market capitalization.
But let’s also be real. Cryptos are among the wildest investment categories available. Cardano could be third today and barely hanging onto the top 30 tomorrow. That’s why onlookers, if they decide to partake in cryptos, often prefer the established history of Bitcoin than the more speculative altcoin category.
However, this circumstance also creates different trading behaviors between Bitcoin and up-and-coming altcoins. For instance, based on historical day-over-day returns going back to October 2017, ADA’s average performance by calendar day is as follows:
- 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, Fridays and Saturdays average a return of 1.27%, while including Sunday, the average turns out to 0.92% returns. No matter what, it far exceeds the Monday through Thursday average return of 0.36%.
Moreover, Thursday has so far been the only day that has brought negative returns on average. Indeed, broken down by individual years, Thursdays tend to be the weakest or one of the weakest days to hold Cardano. Certainly, though, you can use this knowledge to your advantage if you like to day trade cryptos.
If you must buy Cardano, do it on a Thursday.
It’s not entirely clear what makes Thursday such a laggard. But in my opinion, the weekend bump up beginning on Friday is understandable — Cardano is basically a blue-collar crypto. It’s the regular folks, those with nine-to-five jobs, that are buying ADA.
Since worker bees tend to perk up as the weekend approaches, the buying ensues while it subsides for the white-collar Bitcoin.
Monday Blues for 2021
While the hard data shows that Thursday is an underperformer for Cardano, in the year-to-date, Monday has become the nonachiever, generating an average daily return of -0.13%.
It’s quite a remarkable 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 crypto thesis. Last year, the pandemic forced millions of workers to operate remotely. Therefore, the Monday morning blues was no longer a thing. But in 2021, as companies steadily recall their employees, those blues have likewise returned.
To me, this is further evidence that Cardano is the people’s cryptocurrency. Therefore, if you’re going to trade it, you should trade knowing that ADA is much more levered to the fundamentals of the working man rather than Bitcoin’s sophisticated private investor.
On the date of publication, Josh Enomoto held a LONG position in ADA and BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.