Bitcoin rebounded this weekend after sharp weekly losses, driven by tight market liquidity, CME futures shortages and major geopolitical developments.
Summary
- Bitcoin staged a weekend recovery despite a 23% quarterly decline, while altcoins like Hyperliquid and Zcash lost double digits.
- Low liquidity from closed Wall Street ETF trading amplifies weekend volatility and the “CME gap” effect.
- Talks about peace in Ukraine and impending US interest rate decisions affected investor sentiment and movements in global markets.
According to market data, Bitcoin enjoyed a weekend rally after a week of significant losses in the cryptocurrency markets. The digital asset had reached the critical support level earlier this week, while numerous altcoins, including Hyperliquid (HYPE) and Zcash (ZEC), posted double-digit percentage losses over the seven-day period.
The weekend price surge follows a pattern seen in recent weeks, with Bitcoin (BTC) gaining ground on Saturdays and Sundays before falling again on weekdays, chart analysis shows. Market observers have attributed this phenomenon to reduced liquidity during weekend trading periods.
Cryptocurrency markets brace for Bitcoin and alt-coin rally
Cryptocurrency markets experience dramatically lower trading volumes on weekends, when Wall Street-traded Bitcoin funds are closed and institutional investors are not actively trading. Research published An Advances in Consumer Research study in August found that trading volumes are typically 20% to 25% lower on weekends, “creating a thinner market environment where momentum-driven trades can have a greater price impact.”
The study found that weekend momentum strategies “consistently outperform their weekday counterparts across all cryptocurrencies, with average daily returns on weekends often doubling those on weekdays.” According to the research, the effect appears to be greater for digital assets with smaller market capitalizations.
Bitcoin futures traded on the Chicago Mercantile Exchange close at the end of the business week. The price movements that occur during weekend trading create what market participants call the “CME gap,” with prices often returning to pre-weekend levels once futures markets reopen, market analysts said.
In addition to trading volume factors, specific developments may also have contributed to the price movement over the weekend. Ongoing negotiations to end the conflict in Ukraine have advanced. This weekend, talks took place in Switzerland between delegates from the United States and Ukraine. Former President Donald Trump has proposed a 28-point peace plan as part of diplomatic efforts.
Futures on the Dow Jones, S&P 500 and Nasdaq 100 all rose on Monday morning as investors assessed the diplomatic developments, according to market data. The Federal Reserve’s decision to leave open the possibility of a further rate cut next month may also have affected market sentiment.
Bitcoin faces near-term challenges in breaking through key resistance levels. During the Thanksgiving holiday week in the United States, Wall Street will be closed on Thursday and only open for half a day on Friday, resulting in reduced trading volumes similar to weekend conditions.
According to market data, Bitcoin recorded its first weekly close in positive territory in four weeks. However, the cryptocurrency remains down 23% this quarter, putting it on track for its worst year-end performance since 2018.
