How to Use Turnover Rate to Validate an Uptrend

2022-06-01 00:53:08 · 1692 views · 5 min read

 

The Turnover Rate indicator is an exclusive token metric only available on Candlestick.

In general, The Turnover Rate can reflect the activity status of traders on decentralized exchanges. According to historical data, the all-time high peak of turnovers appears before a token reaches the price peak.

 

 

Alpha Trader Tips - Turnover Rate ATH presents before Price Peaks

The Turnover Rate all-time high is often present before the price climbs top.

 

Example 01 - $ELON

Token: Dogelon Mars

Indicator: 1-year time frame Turnover Rate

Turnovers All-Time High: October 30, 2021

Price Top: October 31, 2021

 

 

Example 02 - $FXS

Token: Frax Share

Indicator: 1-year time frame Turnover Rate

Turnovers All-Time High: April 2, 2022

Price Top: April 4, 2022

As a result, the Turnover Rate could act as an indicator searching for a long-term price top.

 

 

Alpha Trader Tips - Combine Turnovers with Vol & Net Buy Indicators

Be aware that the Turnover Rate may become ineffective if you apply it as a single indicator. Instead, it should be combined with the Trading Volume with Size Distribution and Net Buy Amount metrics to validate a firm uptrend.

 

Example - $FTM

Token: Fantom

Indicator: 1-year time frame Turnover Rate

Turnovers All-Time High: August 30, 2021

Trading Volume All-Time High: August 30, 2021

Net Buy Amount: Positive on August 30, 2021

 

After multiple indicators turned bullish that validating a solid uptrend, Fantom price set new highs in a row.

The Ensuing Price Highs: September 9, 2021, October 9, 2021, and October 26, 2021.

 

 

 

 

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