Weekend liquidity
Why can prices move more sharply on Saturdays and Sundays in a market that never closes?
In plain words
Crypto markets trade every hour of every day, but trading is usually thinner at the weekend: fewer institutions participate and fewer resting orders sit in the book, so a given amount of buying or selling moves the price further.
Why it matters
Liquidity is the depth of resting orders available at each price. With less of it, entries, exits and stops execute at worse prices, and gaps between quotes widen. Risk measured from weekday behaviour can therefore understate what a weekend position may endure.
In a real week: ETH, week of 21 December 2020
In the week of 21 December 2020, ETH gained 7.37% on 4.69bn of dollar volume, 1.52 times its prior 12-week average. Yet its weekly high of 717.13 was set at 16:00 UTC on Sunday 27 December, the week's best day at 7.48%, and its largest single hourly move of 5.62% struck at 14:00 UTC that same Sunday.
A common mistake
Assuming quiet weekends mean safe weekends. Thin order books cut both ways: less trading volume can produce larger, faster price swings, not smaller ones.