中文版本： 擠壓動能介紹
<aside> 🏄 Squeeze Momentum is primarily used to assess whether the market is trending or ranging. ‼️ Risk warning: any data/indicator has its advantages, disadvantages, and limitations. Please make sure to understand them carefully, crypto trading contains substantial risk and is not for every investor. DYOR.
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BTC 1D Squeeze Momentum
**Squeeze Momentum** (SM) is a trend-based metric that depicts the volatility of tokens. By observing the Squeeze Momentum, users can gain insights into the trends and changes in token price fluctuations. The orange dots on the centerline of the Squeeze Momentum signify a state of consolidation (low volatility), often implying indecision and a ranging market. Green histogram bars indicate potential upward price movement, while red bars suggest potential downward movement. The size of the bars reflects the intensity of volatility.
*The principle behind Squeeze Momentum references John Carter's "TTM Squeeze" volatility indicator and its derivative version by LazyBear.
Squeeze Momentum is widely utilized to help traders observe market trends and changes. It can also be paired with other datasets to analyze the stages of trend development.
💡 Breakout from Squeeze (Orange Dots Disappear): When the orange dots disappear, the market might shift into a trending phase. Observing the performance of histogram bars after the squeeze breakout can help identify the trend direction and devise momentum-following strategies.
Since Squeeze Momentum primarily reflects volatility, it might respond simultaneously or lag behind price changes.
🙋🏻♂️ Here is an example:
BTC 1D Squeeze Momentum
Using BTC as an example, the chart highlights multiple squeeze breakouts. It is evident that post-breakout points 1 and 3 saw increasing green bars, suggesting that going long during these phases was optimal. Conversely, post-breakout points 2, 4, and 5 saw strengthening red bars, indicating a better opportunity for shorting. Observing the disappearance of orange dots is more significant than their appearance, as post-breakout histogram changes are key focus areas.
Understanding the Squeeze Momentum concept serves as a solid reference for traders in trend identification. It can also be combined with other Blave datasets to analyze trend stages.
The chart also has some unmarked breakouts, showing histogram bars moving contrary to expectations. For instance, like the one after point 4, a reduction in green bars suggests a reversal strategy might be more appropriate.
BTC 1D Squeeze Momentum
The levels of Squeeze Momentum can also serve as an additional observation metric. For instance, examining historical high and low levels can help determine whether momentum is entering extreme states. Additionally, comparing the reaction between momentum and price can reveal potential data divergence scenarios.