This crypto winter wasn’t a very long one. Having briefly touched $34,000 in the second half of January, Bitcoin (BTC) is on its way up again, touching the $45,000 mark on Feb. 10. Many altcoins have been catching up as well and posting double-digit weekly returns. However, not all relief rallies were equally impressive. Is there a way for traders to pick the assets that are about to pull off the strongest rebounds?
Luckily, bullish marketwide reversals tend to look similar in terms of both price movement and other variables that shape market activity: rising trading volumes, spikes of online attention to individual tokens, and the elevated sentiment of social media chatter around them. Furthermore, the conditions that underlie individual assets’ rallies in a resurging crypto market often recur as well.
What this means in practice is that automated data intelligence tools capable of detecting similarities between past and present trading conditions around crypto assets — such as the VORTECS™ Score, available to subscribers of Cointelegraph Markets Pro — can be especially efficient in alerting traders to impending price spikes when the market flips bullish.
Bullish confidence
The basic principle behind the VORTECS™ Score is a comparison between the asset’s trading conditions right now and those in the past. The algorithm constantly sifts through years’ worth of each digital asset’s historical data on price movement, trading volumes, and Twitter activity and social sentiment, seeking to identify combinations of these metrics that in the past regularly showed up before huge price pumps.
The result is a Score that ranges between 0 and 100. Scores of 80 and above indicate historical outlooks that are bullish for roughly the next 10 to 72 hours. If a coin hits 90 or goes even higher, it means that the model is highly confident that it observes a pattern that consistently preceded past upsides.
In a normal week, there will be an average of three to four instances of a VORTECS™ Score of 90 or above. But with the crypto market recovering, we saw 10 such cases from Feb. 3 to 10. On average, the assets that achieved a Score of 90 added 7% of value 24 hours after hitting the 90-VORTECS™ threshold and gained 15% after 72 hours. Here are the most impressive cases.
KEEP: A weekly return of +58.64% after a VORTECS™ Score of 92
MNW: A weekly return of +54.63% after a VORTECS™ Score of 90
LEO: A weekly return of +52.56% after a VORTECS™ Score of 91
As a famous saying goes, history does not repeat itself, but it often rhymes. Even the most favorable historical precedent is not a guarantee of future price action, but incorporating automated analysis of crypto assets’ past performance data into a trading strategy can hugely improve its performance.
Cointelegraph is a publisher of financial information, not an investment adviser. We do not provide personalized or individualized investment advice. Cryptocurrencies are volatile investments and carry significant risk including the risk of permanent and total loss. Past performance is not indicative of future results. Figures and charts are correct at the time of writing or as otherwise specified. Live-tested strategies are not recommendations. Consult your financial adviser before making financial decisions.
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