i asked a large language model to tell me the best times of day to place recurring bitcoin buy orders. tl;dr 11pm and 3am CDT
the reasoning was impressively thorough:
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To determine the best times of day in Texas (Central Daylight Time, CDT) to set recurring daily Bitcoin buy orders for achieving the lowest dollar-cost average (DCA) over time, we need to analyze historical price movements, global Bitcoin buying trends, and market activity patterns. The goal of DCA is to mitigate the impact of volatility by spreading purchases over time, ideally buying at lower price points to reduce the average cost per Bitcoin. Based on available data and market behavior, here’s an analysis leading to two recommended times.
**Key Factors Influencing Bitcoin Price and Buying Opportunities**
Market Volatility and Intraday Patterns:
- Bitcoin trades 24/7, unlike traditional stock markets, and its price is influenced by global activity across time zones. Studies indicate that Bitcoin exhibits intraday periodicities in trading volume and volatility, often aligning with the opening hours of major global financial markets (e.g., U.S. and European stock exchanges).
- Research suggests a "reverse V-shaped pattern" in trading activity, with higher volume and volatility during U.S. and European market hours (approximately 9:00 AM to 4:00 PM CDT) and lower activity during Asian market hours or late-night U.S. hours.
- Lower trading volume periods, such as early morning or late night in Texas, often coincide with lower liquidity, which can lead to price dips but also higher volatility.
Global Buying Trends:
- Bitcoin’s price is driven by global demand, with significant activity from institutional investors, retail traders, and large holders ("whales"). Major price movements often follow regulatory announcements, macroeconomic events (e.g., U.S. Federal Reserve rate changes), or institutional buying (e.g., Bitcoin ETF inflows).
- Periods of low market activity, such as early morning or late evening in Texas, may offer opportunities to buy at lower prices due to reduced trading volume, as prices tend to dip when the market is less active.
Historical Price Trends:
- Bitcoin’s price history shows significant volatility, with sharp rises and corrections often tied to external events (e.g., ETF approvals in 2024 or Trump’s re-election in November 2024). However, intraday price data suggests that prices are generally lower during quieter market hours, such as early morning or late night in the U.S.
- For example, a 2023 analysis noted that cryptocurrency prices, including Bitcoin, tend to be lower early in the morning before the New York Stock Exchange opens (around 8:30 AM CDT) and during low-activity periods like late night or weekends.
Dollar-Cost Averaging Strategy:
- DCA involves buying a fixed dollar amount of Bitcoin at regular intervals, regardless of price, to average out the cost over time. The strategy benefits from buying during price dips, which are more likely during periods of lower market activity when fewer buyers are active.
- To optimize DCA, the focus is on identifying times when prices are statistically more likely to be lower due to reduced buying pressure or market activity.
**Analysis of Optimal Times in Texas (CDT)**
Texas operates in CDT, which is UTC-5 during Daylight Saving Time (March to November). Bitcoin’s global market is influenced by trading activity in key financial hubs:
- U.S. Markets (New York): Open from 9:30 AM to 4:00 PM EDT (8:30 AM to 3:00 PM CDT).
- European Markets (London): Open from 8:00 AM to 4:30 PM GMT (3:00 AM to 11:30 AM CDT).
- Asian Markets (Tokyo, Hong Kong): Open from 9:00 AM to 3:00 PM JST (7:00 PM to 1:00 AM CDT the previous day).
Based on the reverse V-shaped trading pattern, Bitcoin trading volume and volatility peak during U.S. and European market hours (roughly 3:00 AM to 3:00 PM CDT) and are lower during Asian market hours or late-night U.S. hours. Lower volume periods, such as early morning or late night in Texas, are more likely to see price dips due to reduced liquidity, which can be advantageous for DCA.
**Recommended Times for Recurring Buy Orders*"
To maximize the chances of buying at lower prices for DCA, we target times with historically lower trading activity and potential price dips, based on global market patterns and intraday trends. The two best times in Texas (CDT) are:
- 3:00 AM CDT:
—Rationale: This time aligns with the early morning in Texas, coinciding with the opening of European markets (8:00 AM GMT) but before significant U.S. market activity begins. Trading volume is typically lower than during peak U.S. hours, and prices may dip due to reduced liquidity.
—Global Context: Asian markets are closed or winding down (e.g., Tokyo closes at 1:00 AM CDT), and U.S. traders are largely inactive, leading to a quieter market. This period often sees lower buying pressure, increasing the likelihood of purchasing Bitcoin at a relatively lower price.
—DCA Advantage: Buying at this time captures potential price dips before the higher volatility of U.S. and European trading sessions, which can drive prices up.
- 11:00 PM CDT:
—Rationale: This time falls during late-night hours in Texas, when U.S. markets are closed, and European markets are inactive. Asian markets (e.g., Tokyo, Hong Kong) are in their early trading hours, but global trading volume is generally low. Lower volume often correlates with price dips, as fewer buyers are active.
—Global Context: The overlap of low activity between U.S./European and Asian markets creates a window where liquidity is reduced, potentially leading to lower prices. This aligns with findings that cryptocurrency prices tend to be lower during off-peak hours, such as late night in the U.S.
—DCA Advantage: Buying at this time targets a period of reduced market activity, increasing the chance of acquiring Bitcoin at a lower price point, which helps lower the average cost over time.
**Considerations and Caveats**
- Volatility Risk: Bitcoin’s price is highly volatile, and even low-volume periods can see sudden price swings due to news, whale activity, or global events. DCA mitigates this by spreading purchases, but no time guarantees the absolute lowest price.
- Exchange and Fees: Ensure buy orders are placed on a reliable exchange (e.g., Coinbase, Binance, Kraken) with low fees, as transaction costs can impact DCA effectiveness.
- Global Events: Monitor macroeconomic events (e.g., Federal Reserve announcements) or regulatory changes (e.g., ETF approvals), as these can cause price spikes regardless of time of day.
- Weekend Trends: While weekends may see lower prices due to reduced trading volume, the data does not show significantly larger price swings compared to weekdays, so daily buys are likely sufficient without specific weekend targeting.
**Final Answer**
The two best times of day in Texas (CDT) to set recurring daily Bitcoin buy orders to increase the chances of achieving the lowest dollar-cost average are 3:00 AM CDT and 11:00 PM CDT. These times align with periods of lower global trading volume and potential price dips, based on historical intraday patterns and global market activity. Always consult a financial advisor before investing, as Bitcoin carries significant financial risk due to its volatility.
