You cannot predict the future, but you can learn from the past.
And some cryptocurrencies are (a lot) more predictable than others, when you analyze their historical trading patterns.
In fact, five cryptocurrencies in particular have shown the kind of trading predictability that can give cryptocurrency traders with sharp eyes a huge advantage in the markets.
All five of these icons showed one thing in common:
- After detecting strong bullish conditions, the average increase in value when measured after 24, 48 and 72 hours
- After detecting severe bullish conditions, it also rose on average after 24, 48 and 72 hours
- Minimum average gain 72 hours after the extreme flag was a staggering 10%
While this is a measure of past trading activity (and of course) not a promise of future performance, it is worth noting that these tokens, led by Avalanche (AVAX) consistently exhibit behaviors that mediate significant gains, even as other tokens – including AAVE and Curve (CRV) It tends to *decrease* in value over similar time frames, and other coins still show little correlation to historical trading conditions at all.
Background to determine predictability
If you’ve been following Cointelegraph for the past year, you’ve likely read about Markets Pro’s proprietary data intelligence platform, the quantitative trading indicator VORTECS™ Score.
In purely hypothetical automated tests, the metric generates some mind-blowing ROI which can be in the tens of thousands of percentage points when doubled over several months.
When it comes to setting historical precedent for working as a regular investor, knowing the individual habits of each crypto asset is more useful than marveling at aggregated data. Here is one way that traders can see which assets are most likely to follow familiar paths on their way to making huge returns.
Get professional market now
Who is the history rhymes the most?
The idea with VORTECS™ Score is to provide traders with a comprehensive view of the multidimensional patterns in the historical performance data of crypto assets. The underlying principle behind the usefulness of the score is that individual symbols often behave in remarkably similar ways in terms of measures of trading and social sentiment… Days before their prices (or tank) explode. When spotted early, these regularities can inform trading decisions, although they are by no means predictive of price action.
Average historical gains
The chart contains twenty coins that had the most VORTECS™ points above 80 or 90, which have been counted since the platform was launched.
High scores indicate the algorithm’s confidence that the current view of the coin is historically bullish. A score of 90, although rare, is an expression of the algorithm’s confidence that prices usually move higher and for more purpose when they have experienced similar trading conditions in the past.
The bars represent average gains after certain times of reaching the high score. For example, the green bar, set as 72/90 in the legend, represents the average gains made by the asset 72 hours after the score is 90; The orange bar shows average returns 48 hours after reaching 80° VORTECS™.
Avalanche (Afax) Perhaps the most obvious and consistent trade for cryptocurrency investors is using historical analysis as part of their research. Not only that high scores are directly correlated with price appreciation, but the gains fully bolstered the algorithm’s thesis.
80 points, sale after 24 hours: average gain 3%
80 points, sale after 48 hours: average gain 6%
Score 80, sell after 72 hours: average gain 9%
Score 90, sell after 24 hours: average gain 12%
Score 90, sell after 48 hours: average gain 16%
Score 90, sell after 72 hours: average gain 28%
Others are also very consistent, with bars closely spaced together.
Axie Infinity (AXS) Great example: 4% at 24/80, 7% at 48/80, 9% at 72/80.
Others provided modest returns after hitting 80 but did exceptionally well after hitting 90:
for example, Tellor (TRB) With average returns of 5% after 72 hours after hitting 80 and 17% in 72 hours after scoring 90 points.
Some columns even indicate below zero, indicating those symbols that tend to lose value after high VORTECS™ results – however, these symbols are greatly outnumbered.
The majority of crypto assets above 80 in VORTECS™ see a steady rise in the next 24 to 72 hours, and often longer.
What the chart indicates is that traders can be more confident when the VORTECS™ result lights up AXS, MATIC, AVAX, LUNA, TRB While exercising extra caution with the likes of AAVE or CRV.
The Markets Pro team constantly tracks the performance of individual assets as well as the score itself. Detailed breakdowns of relevant data points are published at the end of each week in the VORTECS™ Weekly Report to help subscribers get the most out of their membership.
Cointelegraph Markets Pro is available exclusively to members on a monthly basis at $99 per month, or annually with two free months included. It carries a 14-day money-back policy, to make sure it fits your cryptocurrency trading and investing research needs, and members can cancel at any time.
Cointelegraph is a financial information publisher, not an investment advisor. We do not provide personal or individual investment advice. Cryptocurrencies are volatile investments and involve significant risks including the risk of permanent and complete loss. Past performance is not indicative of future results. Figures and graphs are correct at the time of writing or as otherwise specified. The directly tested strategies are not recommendations. Consult your financial advisor before making financial decisions.