It might appear that the price volatility of digital assets and the lightning speed with which crypto markets move would mean that those who act faster get the most important rewards.
And in certain cases, this is true, for example when a listing ad for a token on Coinbase or Binance is first made public and the asset's price line becomes nearly vertical.
But in many cases, the tortoise beats the hare.
This principle clearly works when it comes to traders using quantitative style tools to improve their decision making. An example is the VORTECS โข score, an algorithmic comparison between historical and current market patterns and social activity around a coin.
While the VORTECS โข algorithm is capable of detecting historically bullish conditions around crypto assets, high scores are rarely immediately followed by price spikes. In fact, the highest returns consistently arrive for the next few days after the high scores appear. What does it reveal about the nature of the crypto market?
The early riser receives the worm (but waits to eat it)
Available exclusively to subscribers of Cointelegraph Markets Pro, the VORTECS โข score is an indicator powered by artificial intelligence that looks for historical similarities in a multidimensional set of variables. These include changes in the price of a crypto asset, trading volume, social sentiment, and tweet volume, among others.
The higher the VORTECS โข score, the more confident the model is that the observed combination of key metrics around the token resembles past conditions that presaged significant price increases. Scores above 80 are confidently considered bullish, while a rarer view of a 90+ score suggests that the asset's outlook is wildly favorable, judging from its historical price action track record.
However, the time is intentionally fuzzy as the model is designed to detect conditions that had preceded the rallies between 12 and 72 hours. In fact, although the algorithm is designed to flag bullish conditions as soon as possible, it consistently delivers the best results to crypto traders in days, rather than hours.
Historical data shows that, on average, assets that score high on the VORTECS โข score provide consistent, albeit small, returns as early as six hours after reaching scores of 80, 85 and 90.
Therefore, crypto investors who rely on Markets Pro data to hone their trading strategies are often tempted to lock in profits early on. However, the same data suggests that it often makes sense to stand firm rather than take advantage of early gains.
HODL, even if it's just for a day or two?
The table below presents the average returns after a crypto asset scored 80, 85, or 90 for a week. Each asset could only produce one watch per day, that is, if a coin goes from 79 to 81, then back to 79, and then back to 80 once more in a few hours, only its first entry at 80+ will count.
As can be seen from the table, the longer that assets pass the 80, 85 or 90 VORTECS โข Score threshold, the more likely they are to generate higher returns. While these stats only reflect the price movement of a single week, the pattern is actually observed very consistently throughout Markets Pro's history dating back to early 2021.
In fact, 48 hours is not the limit. When it comes to ultra-high scores above 90, some Markets Pro subscribers report that they generate consistently large profits by holding such coins for a full week or 168 hours.
These observations suggest that the cryptocurrency market might not be as chaotic and capricious as many believe. Although many moves are clearly driven by waves of FUD and hype, the broader market for digital assets exhibits identifiable regularities and recurring patterns of trading and social activities that can take days and weeks to accumulate before asset prices move. .
The Cointelegraph Markets Pro VORTECS โข score is simply a way to identify the conditions that lead to these movements, as soon as possible. It is up to the individual trader to decide when to take the profits.
Cointelegraph Markets Pro is exclusively available to members monthly at $ 99 per month, or annually with two months free included. It carries a 14-day money-back policy, to ensure it meets the crypto trading and investment research needs of subscribers, and members can cancel at any time.
Cointelegraph is a financial information publisher, not an investment advisor. 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 graphics are correct at the time of writing or as otherwise specified. Live tested strategies are not recommendations. Consult your financial advisor before making financial decisions.
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