The US stock market being closed for the Juneteenth holiday may indeed have some potential impacts on the cryptocurrency market, mainly reflected in the following aspects:
Reduced liquidity and increased volatility:
Decreased trading volume: Many institutional investors and quantitative trading firms participate in both the US stock and cryptocurrency markets. The closure of the US stock market means that this active group of traders may reduce their operations on that day, leading to a decrease in the overall trading volume of the cryptocurrency market.
Shallower market depth: A decrease in trading volume is usually accompanied by a shallower market depth. This means that relatively small buy and sell orders may have a greater impact on prices than usual.
Amplified volatility: In an environment of lower liquidity and shallower market depth, any slightly larger buy or sell orders are more likely to trigger significant price fluctuations.
Lack of traditional market indicators:
Loss of reference: The cryptocurrency market, especially Bitcoin, has shown a certain correlation with traditional risk assets recently. With the US stock market closed, cryptocurrency traders lose the most important reference indicator for traditional market sentiment and trends on that day.
Turning to internal factors and global markets: In the absence of US stock market guidance, market attention will be more focused on:
News and events related to cryptocurrencies themselves: such as regulatory developments, important project updates, hacker attacks, exchange announcements, etc.
Macroeconomic data and events: Economic data from Europe, Asia, or other regions, central bank statements, etc.
Possible amplification of the impact of specific news: Due to the overall reduction in market participation, any sudden news directly related to cryptocurrencies, without a large liquidity buffer, may have an amplified effect, resulting in more pronounced short-term price fluctuations.
Caution in the derivatives market: In a low liquidity environment, the funding rates of derivatives such as perpetual contracts may become more volatile.
High-leverage positions face higher liquidation risks during significant price fluctuations. Insufficient market depth may lead to increased price slippage when liquidations occur.
Regional market influence relatively increases: The absence of US trading hours means that the influence of European and Asian trading hours will relatively increase on that day. The activity of traders in these time zones and regional news may have a more significant impact on prices.