Do you DCA weekly? You better DCA on these days of the week then.

This individual study of each week on the course of Bitcoin since 2018 reveals interesting conclusions. Indeed, the average performance seems to be affected according to the day of the week. Consequently, the average performance on Wednesdays since 2018 is +0.38%. In contrast, the average performance on Thursdays is -0.27%. The purpose of such analysis is to "filter" periods where the probabilities of loss are higher.

This graph shows a significant conclusion and reveals the existence of patterns. Several observations can be drawn from the analysis.

Average daily performance according to the day of the week. Based on data from 2018 to 2023. Graph and data by Thomas Andrieu

On the one hand, the weekends show a significant weakness in performance. This seems justified fundamentally. Bitcoin is highly correlated with stock indices, which are closed on weekends. Therefore, the stagnation of Bitcoin over the weekends is a response to the inactivity of traditional markets.

On the other hand, Mondays and Wednesdays appear to be the most performance-oriented days. The average performance on Mondays and Wednesdays is significant, exceeding +0.3%. In fact, the average daily performance of Bitcoin (across all days) is +0.15%. Without Mondays and Wednesdays, the average performance of Bitcoin since 2018 would have been only +0.06%!

What are the theoretical performances?

Ultimately, Mondays and Wednesdays alone account for over 55% of Bitcoin's total performance, despite representing less than 30% of the time. This temporal effect limits exposure to risk and maximizes performance.

Therefore, theory suggests that an individual who buys Bitcoin for 24 hours every Monday and Wednesday would have an average weekly performance of +0.72%, equivalent to an average annual performance of +45.18%. Of course, this would depend on the investor's profile and implementation of this strategy over the past five years.

In theory, this strategy allows for outperforming the market in the long run. The average annual performance of Bitcoin between 2018 and 2023 is +37%. On the other hand, this strategy leaves open the possibility of gaining nearly 8 percentage points of performance per year. However, as we will show, this strategy is subject to variability, limiting its relevance retrospectively.

Which days are the most reliable?

Studying the average daily performance alone is not sufficient. It is possible that the actual variations deviate significantly from the average, with extremely high or low variations. To correct this effect, we measured the volatility of the variations according to the day of the week. We then adjusted the average daily performance based on the volatility of the data. This gave us an "index" that shows the days with an ideal performance/reliability balance.

Average daily performance adjusted by day of the week. Based on data from 2018 to 2023 (average/volatility). Graph and data by Thomas ANDRIEU

We observe that Wednesday is the day that exhibits the best reliability and performance. Next, we note Monday and Friday. In contrast, Thursday appears to be a fairly reliable day with negative performance. However, Thursday has the highest volatility, meaning that the significantly bearish Thursdays account for a significant part of the behavior. Conversely, Saturday is the least volatile day of the week, but its bullish performance is not very pronounced.

Is this rule still valid in 2023?

While a long period can demonstrate the validity of our analysis, it is important to verify it in recent times. This general observation may not exactly hold true for certain years. In such cases, it is preferable to study the average performance over a shorter period (the past year). Thus, over the past 52 weeks, slightly different conclusions emerge.

Average daily performance by day of the week. Based on data between July 2022 and July 2023. Graph and data by Thomas ANDRIEU

Between July 2022 and July 2023, Thursday is the most performance-oriented day of the week. The average performance on Thursdays stands at +0.32%. This observation confirms that Thursday is an unstable day and its performance can vary radically from year to year. The strong performance on Wednesday seems to have shifted to Thursday in the recent period.

Nevertheless, we find that Tuesday, Wednesday, and Monday are the most performance-oriented days of the week since 2022 (excluding Thursday). An investor who positioned themselves every Monday and Wednesday over the past year would have achieved an annual performance of +17.7%. This performance would have been +30% if Wednesday was included. While not insignificant, it remains lower than Bitcoin's overall performance over the same period (+50%).

It is clear that this strategy is more effective when there are significant performance differences between the days. Comparable performances between the days (as in 2022) do not maximize investor performance. The probability of outperforming the market becomes lower.

The past two years were highly distinctive.

Between July 2021 and July 2023, the price of Bitcoin declined by 15%. However, during the same period, the days exhibited significantly different performances. Tuesday and Wednesday consistently stood out as bullish days. However, Monday, Thursday, and Friday were strongly bearish between 2021 and 2023. Interestingly, Sunday showed a strong performance in 2021. This analysis once again highlights the extreme variability of this strategy. Nonetheless, Tuesday and Wednesday seem to stand out in terms of reliability.

Average daily performance according to the day of the week. Based on data from July 2021 to July 2023. Graph and data by Thomas ANDRIEU

Furthermore, Monday was highly bearish in 2021. A Monday/Wednesday strategy would have resulted in an annual loss of 3.6% between 2021 and 2023, which is still acceptable. It is worth noting that Bitcoin declined by 15% during the same period. Therefore, in this case, there is a relative outperformance.

In conclusion

There is indeed an asymmetry in Bitcoin's performance based on the days of the week. There seems to be an "early-week effect" that concentrates most of Bitcoin's performance. The data studied between 2018 and 2023 shows that Monday and Wednesday would be the most performance-oriented days on average. In contrast, the weekend experiences a low performance. In general, the combination of Monday, Tuesday, and Wednesday demonstrates outperformance compared to the rest of the week.

Nevertheless, this rule has exceptions and evolves over time. It is not uncommon for the most performance-oriented days to vary significantly from one year to another. For example, Thursday, which was the most negative day since 2018, became the most performance-oriented day between 2022 and 2023. Similarly, Sunday showed a strong performance in 2021. Therefore, this rule is highly variable and calls for caution. However, it is still observed that this strategy can provide numerous periods of outperformance with minimum risk exposure.