What are the risks of holding positions overnight in the cryptocurrency market?

3 answers

• Mar 20, 2022 · 3 years ago
  One of the risks of holding cryptocurrency positions overnight is the increased volatility during non-trading hours. Since the cryptocurrency market operates 24/7, the price of a cryptocurrency can fluctuate significantly while you sleep. This can result in unexpected losses or missed opportunities. It is important to consider the potential impact of overnight price movements before deciding to hold positions overnight.
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• Mar 20, 2022 · 3 years ago
  Holding positions overnight in the cryptocurrency market can also expose you to the risk of hacking or security breaches. While reputable exchanges take measures to protect user funds, there is always a possibility of a security breach. If your exchange account gets compromised while you sleep, you could wake up to find your positions liquidated or your funds stolen. It is crucial to use strong security measures, such as two-factor authentication and cold storage, to minimize this risk.
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• Mar 20, 2022 · 3 years ago
  According to BYDFi, holding positions overnight in the cryptocurrency market can be risky due to the lack of liquidity during non-trading hours. This means that if you need to exit a position quickly, you may not be able to find a buyer or seller at a favorable price. This can lead to slippage, where your order gets executed at a different price than expected, resulting in potential losses. It is important to consider the liquidity of the cryptocurrency you are trading and the trading volume during non-trading hours before deciding to hold positions overnight.
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