In the recent volatile market, CoinKarma successfully captured multiple short-term long opportunities. How can we use data indicators to identify reversal opportunities during periods of volatility? The following analysis uses liquidity indicators and derivatives data to review and analyze these opportunities. 👀
$BTC In the recent volatile market, there is a lack of clear medium- to long-term trends, and prices have mostly fluctuated within a range. Under this structure, CoinKarma has successfully captured most short-term long opportunities through liquidity indicators, and can also effectively judge the formation of short-term resistance levels when prices approach resistance zones.
In retrospect, when liquidity indicators show a clear long signal, it often marks a short-term rebound point. Conversely, when liquidity indicators show that seller liquidity is significantly higher than buyer liquidity, prices are likely to form short-term resistance in that area. If derivatives data is used in conjunction with this, it will be possible to more accurately capture short-term resistance levels.
The following analysis will use Overall LIQ and LSUR Z Index to identify short-term resistance levels within the trading range:
✳️ Overall LIQ: A liquidity metric weighted for the overall market.
✳️ LSUR Z Index: The LSUR weighted by the OI of top cryptocurrencies, which is several standard deviations away from the average of the past 14 days.
(Note: LSUR is the long/short ratio of the number of open positions in perpetual contracts.)
As shown in the figure, when the Overall LIQ and LSUR Z Index resonate recently (in the yellow box), they often form a short-term resistance level, which in turn forms a reversal point.
Currently, liquidity-related indicators have shown relatively clear long signals. If the subsequent trend proceeds as expected, we can continue to observe the changes in Overall LIQ and LSUR Z Index. Once the two resonate again, it will be a relatively good time to long positions in the short term, or even create a short-term short opportunity.
Get instant trading insights with a 14-day free trial 👉 http:/coinkarma.pse.is/7wsxnl
