When to buy and when to sell - these are the questions that make investors headache. There are no rules that are fixed so we can follow, but there are models that need attention. This is especially true in cryptocurrencies, where there are many types of token metrics available for correlation analysis with prices.
One of the things (but not always) correlating with price is the active address. For example, when we looked at the entire history of popular tokens last month, we found that many of them show a correlation between price and number of active wallet addresses.
It is not true for all tokens and it is not always true, but evidence shows that the more powerful the cryptocurrency network is, the higher its token price is. That means being able to predict when the network is at its strongest will be possible.
For 17 popular ERC20 tokens, the TokenAnalyst API provides daily network activity history through active addresses. So we looked at the entire history available to all tokens to find out which day of the week was the most active for each token.
We will start with the big picture in this chart that illustrates each token's average daily active address. Some tokens like BAT and OMG have significantly more daily activity than others.
It's hard to pull the day of the week pattern out of this. First, this chart shows which days were the most active overall activity by showing the number of tokens per day of the week as their highest average active days.
As you can see, the active addresses tend to peak in the middle of the working week for most tokens and Sunday is the day with the lowest number of active tokens. None of the 17 tokens tracked by TokenAnalyst had an average active volume lower than the Sunday volume.
Of course, every token is different. Therefore, here a token-to-token breakdown of the average active addresses on each day of the week, from Monday to Sunday. If you are interested in one or more of these tokens, this can tell you when the activity of the week may be at its highest - possibly correlated with more token prices.
For example, you can choose to buy on the days with the lowest average activity and sell on the days with the highest average activity. Historically, many tokens have shown enough price correlation with activity that such a strategy will work if you buy and sell regularly.
For example, looking at the chart below, a BAT investor might set a buy target on Sunday, when activity is usually at its lowest and sells on Tuesday or Wednesday when activity is at its highest. An OmiseGo investor may want to buy on Wednesday and sell on Thursday.
Of course, this strategy will not work for every trade - these charts show broad historical patterns. There is no way to know whether these trends will continue in the future.
We certainly wouldn't recommend investing based on daily activity levels alone, but understanding the pattern's regular activity levels could be one of many significant factors in predicting token prices. have the ability to increase or decrease.
Mr. Teacher
Bitcoin Magazine | Longhash
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