In this article, you will learn what is UTC time and how do time zones affect cryptocurrency market. UTC stands for Coordinated Universal Time. It refers to time on the zero or Greenwich meridian. The different time zones have some effects on the market as financial asset trading firms around the world do not operate at the same time due to different time zones.
What is UTC Time?
UTC time (Coordinated Universal Time) simply refers to the world’s time standard as using standardized timing makes it easier to communicate time among various crypto communities.
In the context of cryptocurrencies, the crypto world runs on UTC.
In contrast to most financial exchanges, cryptocurrencies operate on a 24/7 basis.
Using a standardized time simplifies things greatly as cryptocurrency users are located across the globe and are trading in different time zones.
According to CryptoHash, 12am to 1am UTC is one of the most volatile hours for Bitcoin — and this may be because this period reflects the start of the evening in North America, and the beginning of Asia's working day.
Traders across all assets, including cryptocurrencies, often look to Asian markets for direction and often base their positions based on movements on the continent.
Another study by Forbes Digital Assets in 2019 identified 4pm UTC on a Wednesday as the most volatile timeframe for BTC across several exchanges.
The research found this time was 36% more volatile than the average of all time periods.
The research said this may have to do with the fact the time is right in the middle of the US working week.
On the other hand, the research identified the hours between 8am and 10am UTC on a Monday to be 35% less volatile compared with the average.
How Do Time Zones Affect Cryptocurrency Market?
Trading activity increases with the opening of exchanges in some major countries, for example, the United States, which sometimes leads to the increased volatility and sharp jumps of prices of certain assets. Experienced traders are well aware of this and try to cash out on this, while focusing on general trends of the market.
The vast majority of these markets work around the clock, therefore only temporary price fluctuations may be caused by the human factor. For instance, Asian or American investors may wake up and see a sudden price drop of some cryptocurrency. Then they might start panic selling their coins, worsening the situation on the market. In this case, it is necessary to figure out such trends in advance and to develop a strategy that can help you to save funds from these "panic attacks" on the market.
Trading activities increase with the opening of exchanges in some major countries, which sometimes leads to increased volatility in asset prices. When market times across two major countries overlap, this period increases the market volatility.
This does not affect the cryptocurrency space as exchanges are opened in a 24-hour time fashion.
You may be confident that time zones have little to no effect on BTC price and, as a consequence, the cryptocurrency market in general. On the one hand, traders are not able to earn a couple of percent on the daily market fluctuations. On the other hand, you can leave your money for the night, without any fear that the sudden panic in some countries might halve your cryptocurrency funds.
Bottom Line
The cryptocurrency market is open non-stop all year long. So, whether you use the UTC time zone or not, it will not affect your crypto trading. But knowing about what is UTC Time can help your crypto journey.
