The crypto markets operate 24/7, which poses a challenge for traders who have other daily responsibilities. Additionally, a significant number of participants in these markets are non-professional retail investors. As a result, their attention to the market is limited, leading to delayed reactions.
The constraints on attention in the crypto markets create opportunities for rules-based momentum traders. These traders can capitalize on the delayed reactions of market participants, who may not be able to react quickly due to their other responsibilities.
The human limitations of trading a market that never closes, combined with the presence of non-professional retail investors, contribute to the delayed reactions in the crypto markets. This provides momentum traders with opportunities to profit from the market inefficiencies. Traders should be aware of these dynamics and consider incorporating rules-based strategies to take advantage of the delayed reactions.
