Crypto: The hidden reasons for market instability during weekends
Despite the optimism, the structural weaknesses of the crypto market, particularly the low liquidity during weekends, continue to threaten price stability.
Crypto: The hidden reasons for market instability during weekends
News
While the crypto market is finally breathing after weeks of uncertainty, a persistent danger looms quietly: amplified volatility during weekends. Despite a more serene climate linked to easing trade tensions, the very structure of the market continues to expose investors to risks of sharp fluctuations. To navigate this environment effectively, it is essential to understand the mechanisms at play.
A rebound of confidence under geopolitical influence
The recent rise of bitcoin, with a gain of nearly 11% in a week, illustrates how the crypto market remains extremely sensitive to political signals. This upturn originates from a change in tone from Donald Trump regarding tariffs. The American president mentioned the possibility of a substantial reduction in import duties on Chinese products. This easing has renewed momentum for risky assets, including cryptocurrencies.
However, as highlighted by Bitfinex analysts, this improvement in overall sentiment is not enough to correct the structural weaknesses of the market. They remind us that 'an improvement in sentiment reduces fragility but does not eliminate structural risks such as low liquidity during weekends.' In other words, even when optimism prevails, technical elements can abruptly reverse the trend.
The current dynamics may seem encouraging, but they remain fragile. The observed increases are often temporary and sensitive to unexpected macroeconomic announcements. This fragility explains why bitcoin, after decoupling for a time from the US stock markets, fell below the $75,000 mark.
