What are the potential risks of selling cryptocurrency at the open versus selling at the close?

3 answers

• Dec 29, 2021 · 3 years ago
  Selling cryptocurrency at the open can be risky because the market is highly volatile during the opening hours. Prices can fluctuate significantly, and you may end up selling at a lower price than anticipated. On the other hand, selling at the close can also be risky as there may be a rush of sellers trying to exit their positions, leading to a sudden drop in prices. It's important to carefully analyze market conditions and set appropriate stop-loss orders to mitigate these risks.
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• Dec 29, 2021 · 3 years ago
  When selling cryptocurrency at the open, you may encounter low liquidity, which can result in slippage and impact the execution price. Additionally, market orders placed at the open may be filled at unfavorable prices due to the lack of available limit orders. Selling at the close, on the other hand, may expose you to the risk of overnight price movements, as market conditions can change drastically during non-trading hours. It's crucial to consider these risks and develop a well-defined selling strategy based on your risk tolerance and market analysis.
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• Dec 29, 2021 · 3 years ago
  According to a study conducted by BYDFi, selling cryptocurrency at the open can lead to higher transaction costs compared to selling at the close. This is because the spread between the bid and ask prices tends to be wider during the opening hours, resulting in higher slippage and execution costs. However, it's important to note that these costs may vary depending on the specific cryptocurrency and exchange. Traders should carefully evaluate the cost implications and consider alternative selling strategies, such as using limit orders or executing trades during periods of higher liquidity.
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