Gate Institute: Application and Backtesting of Momentum Indicators in the Cryptocurrency MarketSummary
Momentum investing is based on the assumption of trend persistence and is widely used in traditional finance and cryptocurrency markets. This report takes BTC as the research object, systematically reviews the theoretical basis of momentum strategies, behavioral drivers, and potential risks, providing a framework for empirical analysis.
Momentum can be understood as the "inertia" of prices, commonly quantified as the difference between the current price and historical prices. In the BTC market, short-term momentum indicators (such as the 10-day momentum) can effectively characterize cyclical trend directions.
The momentum effect is closely related to behavioral finance; herd behavior, conformity, and underreaction can reinforce trend continuation. However, unexpected events and emotional reversals may quickly invalidate momentum signals, leading to significant drawdown risks.
This report selects MACD, Bollinger Bands, ADX/DMI, and RSI as core momentum tools, analyzing from the perspectives of trend direction, volatility structure, trend strength, and market
GateResearch·2025-12-12 08:41