5 times crypto traders were warned before their assets plummeted
Everyone likes crypto bull markets, but every green wave inevitably gives way to periods of sideways or downward movements.
Skilled traders know that these phases of the market cycle may also be full of profit opportunities. When deciding when to exit a position and lock in gains, it is not only useful to predict the price increase of digital assets, but also to predict declines and corrections, and it can also help increase profits by short selling crypto assets that have fallen in price.
In addition to keen vision and common sense, data intelligence tools can also help predict price drops.An artificial intelligence-driven indicator can help investors see the upcoming decline as early as possible as VORTECS™ scores, exclusively for Cointelegraph members Market Professional Edition.
Its job is to sift through many years of historical data and determine whether the combination of market and social conditions surrounding each asset is similar to the situation before the sharp rise or fall in prices in the past.
At any given moment, the high VORTECS™ score of a cryptocurrency token means that its prospects are historically bullish; But a low score below 30 indicates that in the past, observed patterns were often accompanied by price drops.
The red VORTECS™ score is much less than the dark green score. The most common situation in which such scores can be observed is when crypto assets rebound rapidly, are overbought, and then undergo large-scale corrections.
Here are five notable examples. Before the price crash, the red VORTECS™ score flashed on the encrypted asset.
DOGE: Memecoin is overheating
VORTECS™ score (green/red) and DOGE price, April 8-15. source: Cointelegraph Markets Pro
Dogecoin (DOGE) presented an example of very high and very low VORTECS™ scores during the week of April 8.
The asset’s score exceeded 80 on the morning of April 13, when the price curve was still flat at around $0.073 (the first red circle). Obviously, the model has felt the familiar arrangement of celebrity tweets and rising transaction volumes. Less than 12 hours later, the price line followed closely, soaring all the way to $0.141.
However, even before the price peaked, the algorithm indicated that the historical Dogecoin rebound was followed by a rebound because the VORTECS™ score fell to the red zone below 30. It was revised to $0.110 a few hours later.
Although the VORTECS™ score is not intended to tell investors when to go long or short, it can provide useful indications of the historical bullish or bearish status of a particular asset-this information can be beneficially incorporated into trading strategies.
COTI: a large-scale surge, a difficult fall
VORTECS™ score (green/red) and COTI price, August 21-27. source: Cointelegraph Markets Pro
After a sharp rise from US$0.29 to US$0.45 in one hour on August 26, the price of COTI began to succumb to the correction.
It quickly fell to $0.37, and then tried to gain upward momentum again when it rose to $0.42.
At this point, the VORTECS™ algorithm recognizes the similarity between the observed conditions and COTI’s past price corrections, and lights up the red score (the red circle in the figure) when the price is still rising. The lightning position is very good. Within two hours, COTI reversed the trend and fell back to around $0.35.
NEAR: Down or the second leg?
From September 5th to 12th, VORTECS™ score (green/red) compared with NEAR price. source: Cointelegraph Markets Pro
From September 7th to 9th, NEAR Protocol surged from US$6.00 to US$11.58 in three days. The question in the minds of all crypto traders is: Where will NEAR go next?
A few hours after the price peaked, the token’s VORTECS™ score fell below 30 (red circle in the figure), informing Markets Pro subscribers that historical precedents indicate an imminent decline, not another part of a rebound.
The price of NEAR was around $11.00, and it was still rising when its score flashed red; 36 hours later, the price dropped to $9.00
MRI: Red score at peak price
VORTECS™ scores (green/red) and NMR prices, April 2-8. source: Cointelegraph Markets Pro
Numeraire (NMR) performed well on April 4th and 5th. When its VORTECS™ Score fell below 30 (red circle in the figure), its price was still heading towards the peak of $78.07. This shows that prices have cooled rapidly after similar rebounds in NMR in the past.
Sure enough, the correction started less than two hours after the minimum score, and the price of NMR fell back to around $63.00 in the next two days.
STX: Green before price increases, red before falling
VORTECS™ score (green/red) and STX price, October 7-14. source: Cointelegraph Markets Pro
In the week of October 8th, Stacks (STX) successfully illuminated both ultra-low and ultra-high VORTECS™ scores for two consecutive days. From October 9th to 11th, STX rebounded strongly from US$1.44 to US$2.29, after which the price of the token began to fall.
At this point, the VORTECS™ algorithm recognizes the combination of factors in the past before the expansion correction, and flashes the red score (the first circle in the chart). In fact, STX quickly began to decline in the next 30 hours, falling all the way back to $1.86.
However, in the middle of the pullback, the token’s VORTECS™ score rose sharply, reaching a high of 88 while the price was still falling. Obviously, the market and social conditions surrounding tokens have turned bullish again, because of larger increases following similar large-scale corrections in the past.
Sure enough, 16 hours after the peak of the VORTECS™ score this week, STX’s rebound returned to this week’s high of $2.39.
Cointelegraph Markets Pro’s VORTECS™ score is Members can use it here.
Disclaimer. Cointelegraph is a publisher of financial information, not an investment advisor. We do not provide personalized or personalized investment advice. Cryptocurrency is an unstable investment and carries significant risks, including the risk of permanent loss and total loss. Past performance does not predict future results. The figures and diagrams are correct at the time of writing or otherwise specified. The strategy of real-time testing is not a recommendation. Before making a financial decision, please consult your financial advisor.