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Weekend crypto: thin books, long wicks and expensive funding

What changes in crypto markets when traditional markets close, and two simple rules for carrying leverage through a weekend.

Liquidity leaves

Market makers and arbitrage desks run lighter on weekends. The same order moves price further, wicks grow longer, and stops that would survive a Tuesday get hit on a Saturday. Your stop distance should account for the day of the week, which almost nobody does.

Funding drifts

With fewer arbitrageurs, funding rates wander toward extremes and stay there. Holding a leveraged position through Saturday and Sunday at elevated funding can cost more than a one percent move against you. You pay rent for the privilege of being on the crowded side while nothing happens.

Sunday night gaps

News lands with no one to absorb it, and the Monday Asian session opens on the result. Positions that were "consolidating nicely" on Friday are where accounts go to die at 2 a.m. Monday.

Two acceptable rules

Either halve your size on weekends, or do not hold leverage through them. Both work. "Same as a weekday" is the only wrong answer, and it is the most common one.

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