A simple analysis of correlation between renko bars, volume and increase in values of a cryptocurrency
Definitions:
Renko bars are formed base on price movement, with box of a specified size either derived arbitrarily or from the ATR(Average True Index). Formation of a renko bar, unlike other candle types is time independent.
Volume is the total value of asset that is exchanged in a given period of time.
This article seeks to show that there is a general behaviour common to coins that are gearing up for an increase (mooning), and that this behaviour is clear and easily visualized using renko bars
What is this “General behaviour”?
Before a cryptocurrency moons, there is usually a protracted period of accumulation where the money bags rack up a substantial amount of the crypto asset.
Identifying the accumulation stage
The accumulation stage on the traditional candle sticks are not usually easily spotted especially for the not too experienced traders. This is because the candlesticks are time based, it has to tick. Renko on the other hand is not constrained by time, but by a condition: a new one is not formed unless the value of ATR is reached. This makes it easy to pack all the activities that happened in terms of volume of asset traded in one “box” rather than spreading it over many candles.
To drive this point home we are going to go through a number of coins and use them to show that there is indeed a correlation between renko bars and increase in value of a crypto currency.
XRPUSDT, BTCUSDT, ETHUDT and AAVEUSDT
These are just few of the pairs that have followed these trend. You can checkout other pairs and see to what extent this correlation works.
Searching for Volume spike on renko charts
It is humanly impossible to seethe through all the hundreds of pairs on any exchange. That’s why we at chartless created a trading tool that helps you filter the market with your favourite indicator based on renko bars or any other candletypes. To search the market for volume spike on renko visit chartless.co and type “Pairs with renko bar up and high volume”.This will show result for pairs which its renko bar just starts going up.
DISCLAIMER: The above is not an investment advice. Always do you own research before investing in crypto currency.
Don’t forget to let me know what you think in the comment section.
Happy trading!