Can Crypto Escape Wall Street's Ghost? How The 'Overnight Effect' In Traditional Markets Affects Bitcoin And Ethereum
Portfolio Pulse from Murtuza Merchant
The 'overnight effect' observed in traditional stock markets, where significant price movements occur outside regular trading hours, is being scrutinized for its relevance in the cryptocurrency market. Unlike the stock market, the crypto market operates 24/7, making it susceptible to news-driven fluctuations at any time. Studies, including one from the Federal Reserve Bank of New York, suggest that crypto might still be influenced by traditional market movements, particularly during the opening hours of other global markets. Factors such as global interdependence, investor sentiment, and the role of Tether (USDT) in the crypto market are crucial in understanding this dynamic. However, crypto's inherent features like decentralization, a continuous news cycle, and high volatility could mitigate the 'overnight effect'.

March 21, 2024 | 9:39 am
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Tether (USDT), a stablecoin pivotal to the crypto market, could experience fluctuations impacting the broader crypto market due to events in traditional markets outside regular trading hours.
Tether's role as a bridge for investors entering or exiting crypto positions makes it susceptible to fluctuations from traditional market events, potentially affecting the broader crypto market. However, the 24/7 nature of crypto trading and inherent market volatility might mitigate this impact.
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