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Volumetric Analysis Algorithm
Concept, Validation, Analysis
Concept
The impact of volume volatility on price action
Compare between recent volume volatility (20ma) and long term volume volatility (200ma) and correlate its impact on the price of the crypto.
Identify whether there are any reproducible and consistent traits that can be used to identify a reliable trend.
01
Compute SMA20 and SMA200 of Volume
03
Analyse mean/median for price move percentage, duration, max draw-up/draw-downs
02
Walk the series to find events where SMA20 > SMA200
04
Correlate if the analyses matches other crypto pairs and validate across different timeframes
Analysis Period: Jan 2021-Jan 2026
Cryptocurrency under test: BTCUSDT
Stats over closed episodes
Total Events: 766
The Avadhe AI Edge
+ Volume Ratio Threshold = 2, increase linearly
+ Change past trend duration to 4 hours
+ Entry position at the 4Hr crossover point
+ Identify last 4Hr trend, Validate if the trend continues or reverses
+ Apply the model to BNB, ETH, SOL along with BTC
Setup
Bear Side Sweep
Bull Side Sweep
Conslusion
The Theory Works !!!
But it still isn't "free money" !!!
7-17 Signals per year per coin
Rare enough that patience matters
Big Drawdowns during winners
Avg 6.8% drawdowns on winning trades
Real World costs not included
Fee, Slippages, Timing, Exchange Costs
In the end, it is not the "Golden Indicator". However 70% success rate is considered as a very good checkpoint to start with. Combining it with the other technical indicators can still give us a consistent edge over others.
This is a technical case study conducted by Avadhe Technologies for educational purposes. It is not trading advice or call action to trade. Users bears sole responsibility for his actions.
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