It may seem that the fluctuating digital asset prices and the lightning speed with which the crypto market moves would mean that those who act the fastest secure the most rewards.
And this is true in some cases – for example, when a token listing on Coinbase or Binance is announced for the first time, and the asset’s price line becomes vertical.
But in many cases the tortoise outperforms the rabbit.
This principle is clearly at work when it comes to using quant-style tools for traders to enhance their decision making. One example is the VORTECS™ score, which is an algorithmic comparison between historical and current patterns of market and social activity surrounding a coin.
While the VORTECS™ algorithm is trained to detect historically bullish positions around crypto assets, high scores are rarely followed by price increases. In fact, the highest returns come after consistently showing top scores over the next few days. What does this reveal about the nature of the crypto market?
Early bird finds the worm (but waits to eat it)
Available exclusively to Cointelegraph Markets Pro clients, the VORTECS™ Score is an artificial intelligence-powered indicator that looks for historical similarity in a multi-dimensional set of variables. These include changes in the price of crypto assets, trading volume, social sentiment and tweet volume, etc.
The higher the VORTECS™ score, the more confident the model is that the observed combination of key metrics around the token resembles previous conditions that foreshadowed significant price increases. A score above 80 is considered confidently bullish, while a rarer sighting of a 90+ score suggests that the asset’s outlook is quite favorable, given the historical record of price action.
However, the timing is intentionally ambiguous because the model is designed to detect conditions that occurred 12 to 72 hours before the first rallies. In fact, although the algorithm is designed to mark bullish positions as soon as possible, it consistently gives crypto traders the best results within days rather than hours.
Historical data shows that, on average, assets that score high on the VORTECS™ score are consistent if there are small returns only six hours after reaching scores of 80, 85 and 90.
Thus, crypto investors who rely on Markets Pro data to refine their trading strategies are often tempted to lock in profits quickly. However, the same data suggests that it often makes sense to hold on to the gains rather than grab early gains.
HODL, if only for a day or two?
The table below presents the average returns after the cryptocurrency asset cleared a score of 80, 85, or 90 in a week. Each asset can receive only one observation per day, i.e. if a coin goes from 79 to 81, back to 79 and then again to 80 in a few hours, only its first entry will be counted to 80+ .
As can be seen in the table, the more time that passes after assets cross the 80, 85, or 90 VORTECS™ score threshold, the more likely they are to deliver large returns. Although these figures only reflect price movement over a week, this pattern is actually seen very consistently throughout Market Pro history beginning in 2021.
In fact, 48 hours is not the limit. When it comes to ultra-high scores above 90, some Markets Pro subscribers report that holding such coins for a full week or 168 hours consistently produces huge gains.
These observations suggest that the crypto market may not be as chaotic and cynical as many believe. While many moves are clearly driven by waves of FUD and hype, the broader market of digital assets displays recognizable regularity and recurring patterns of trading and social activity that take days and weeks before asset prices move. can.
Cointelegraph Markets Pro’s Vortex™ score is one way to identify the positions that lead to these moves – as soon as possible. It is up to the individual trader to decide when to take profit.
Available exclusively to Cointelegraph Markets Pro members for $99 per month on a monthly basis or annually with two free months. It maintains a 14-day money-back policy to ensure it meets the crypto trading and investment research needs of clients, and members can cancel at any time.
Cointelegraph is a publisher of financial information, not an investment advisor. We do not provide personalized or personalized investment advice. Cryptocurrencies are volatile investments and carry significant risks, 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-testing strategies are not recommendations. Consult your financial advisor before making financial decisions.