Quantify Crypto API

The MACD uses three exponential moving average (EMA) calculations to determine its bullish or bearish momentum signal. The Quantify Crypto Trend algorithm includes 11 EMA calculations. Our research shows small steady price movement over a 12-to-48-hour period often precedes significant price moves. The Trend algorithm is designed to detect these smaller moves taking place prior to significant moves.

We have many examples of this pattern. Learn more.

Cryptocurrency price movements have significant spikes and dumps. The primary objective is to capture major wins and avoid severe losses. Being on the correct side for significant price moves is more beneficial over time than the percentage of winning trades.

Using our Trend algorithm to improve your cryptocurrency trading results. Learn More

The MACD is a leading trend-following indicator performing calculations with three different Exponential Moving Averages (EMA). The formula: If (EMA 12 – EMA 26) > EMA 9 (called the signal line) then the MACD is Bullish. The EMA places higher calculation weight and significance on the most recent price points than the Simple Moving Average (SMA) which applies equal weight to all price points. Algorithmic indicators that use EMA averages are more responsive to price swings that occur with an asset. A problem with algorithms that use SMA is that they lag, giving a delayed indication.

The MACD may be the indicator that is used the most by stock traders and our research showed it is also a good indicator for analyzing cryptocurrency price patterns. Two factors for this are the MACD usage of EMAs and that it does not use absolute price ranges. Since cryptocurrency has larger price swings in shorter time periods the MACD is an excellent choice to use as a crypto indicator. Our findings show the 30 Minute, 1 Hour and 2 Hour are accurate time periods to follow.

The Relative Strength Index (RSI), developed in 1978, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Its goal is to identify "overbought" and "oversold" market conditions. For stocks, an RSI value over 70 is considered "overbought" and under 30 is considered "oversold".

Oscillating indicators work best when prices move sideways within a well-defined range. Keep in mind, the RSI was developed for stock market price tracking that were rarely greater than 1% in a single day. However, with cryptocurrency you do not have well defined price ranges and price swings of over 1% is commonplace.

Our research shows reversing the RSI test for shorter timeframes is an excellent indicator for detecting cryptocurrency breakouts. Specifically, an RSI value over 70 for 5-min, 15-min and 30-min candlestick periods is bullish with an increased probability of a price breakout. Conversely, an RSI value under 30 indicates a shift to a bearish downturn. In summary, the RSI, when used correctly for cryptocurrency, is an important signal that a major move is forthcoming.

Review longer term RSI timeframes, specifically daily and weekly candlesticks. Our research shows that using the RSI in the traditional way, as with stocks, (over 70 bullish, under 30 bearish) is most reliable.

In summary, 5 minute, 15 minute, 30 minute, 1 hour, 2 hours, 4 hours: Use inverse RSI signals (over 70 – Potential Breakout). Daily and Weekly: Use normal RSI signal (over 70 – Overbought).