Two overlooked indicators are alerting traders to massive potential price increases.
Cointelegraph Markets Pro gives members access to multiple strategies for finding weekly crypto winners.
This article outlines how to use two overlooked indicators that, based on historical data, have been able to alert traders to massive potential price increases. These indicators can also be indispensable tools for asset discovery.
When these indicators are abnormally high, they warrant a closer look at the featured assets to investigate the reasons behind the abnormal volume dynamics.
Before diving in, it’s important to understand this point: Cointelegraph Markets Pro is made up of multiple, real-time, AI-driven indicators that provide members multiple opportunities to get into select assets before — or just as — their prices take off.
These indicators can be used individually or in tandem to make informed trading decisions. And that’s why, every week, members can look forward to finding winning alerts.
The trading strategy discussed below relies on these two often-neglected metrics:
The Unusual Twitter Volume Indicator
The Unusual Trading Volume Indicator
Below are eight simple steps to follow for this trading strategy:
Step 1: Go to the scanner and sort by Positive Tweets Sentiment.
Step 2: Look for assets with a 60% or higher Positive Tweets Sentiment.
Make sure to customize the scanner view first, so the Positive Tweets Sentiment can be seen. Then click to add the Positive Tweets Sentiment column to the view:
The Positive Tweets Sentiment, by the way, is the percentage of positive tweets about a cryptocurrency over the last 24 hours. The higher, the better, but the target is at minimum a 40%–60% increase.
Step 3: Look for assets with a minimum of 200–400 tweets over the last 24 hours.
Ignore all high-sentiment tokens with very few tweets because these assets are likely giving a false positive. The higher the number of tweets, the more likely that something positive is happening with the asset’s price.
Step 4: Find assets with Tweet Volume that are 50% or more above average.
Tweet vs Avg measures how much tweet volume an asset has today versus its 30-day moving average, so a value of 50% means that an asset’s tweet volume is 50% higher today than it is on an average day.
This indicates a significant and unusual increase in tweet volume. Such an increase tells us that something is going on with this asset, tipping members off to a potential breakout of its price.
To investigate these signals, one should verify the alerts by following the next steps:
Step 5: Look for divergence with price (flat or downward movements in the chart).
Let’s take a look at an example with Gitcoin (GTC):
Positive Tweets Sentiment above 60%? Check.
At least 200–400 tweets in the last 24 hours? Check.
Tweet Volume at least 50% above average in the last 24 hours? Check.
Now, let’s see where the asset’s price is going. It is best if it is flat, snaking sideways or otherwise dipping a bit.
Markets Pro 7-day chart for Gitcoin (GTC) on January 27, 2023
Step 6: Make sure there is sufficient trading volume!
Gitcoin is a small-cap altcoin, so it may be a bit tricky to find exchanges with liquidity to trade this asset. With smaller altcoins and other more illiquid assets, trading volume is volatile and inconsistent — so be aware of the availability and trading pairs.
A minimum trading volume range of around $200,000–$400,000 depending on the pairs available on the specific exchange is recommended for optimal liquidity, but for smaller altcoins like GTC, the trading volume will be much less.
Step 7: Look at what the Twitter buzz is about.
Go to Twitter and find out what’s going on with the asset! Maybe there’s an upgrade, maybe it’s a protocol change, or maybe the company behind the asset finished a money raise.
Read the threads. Get a feel for what’s going on.
Whatever is happening, verify without guessing. It’s part of the due diligence process before taking the final step. This information is vital to determine whether to make the trade, wait and monitor, or pass on it.
Step 8: Set up a limit order to take profit at a comfortable rate of around 5%–10%.
After — and only after — verifying the alerts using the steps above, don’t forget to set up the trade to take some profits. To beat the running rate of inflation, an easy number to use is 10%, but that is up to each member to decide. By setting a limit order to take profit, one can lock in a successful return on every winning trade.
By following these eight simple steps, Markets Pro members can find multiple weekly crypto winners based on Unusual Twitter Volume and Unusual Trading Volume indicators.
This is just one of many solid trading strategies members can take advantage of by customizing their alerts through the Markets Pro platform.
See how Cointelegraph Markets Pro delivers market-moving data before this information becomes public knowledge.
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.
All ROIs quoted are accurate as of Jan. 31, 2023.