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Topic: Minimum volume to significantly change an altcoin's price? (Read 164 times)

copper member
Activity: 2856
Merit: 3071
https://bit.ly/387FXHi lightning theory
The easiest way to determine the effects of buying or selling on price is to look at an order book. The order book is the description of how much buying or selling it would take to move the price. The downside is that it describes the instantaneous changes in price, but not changes to the equilibrium price.

I'm a victim of being able to predict $10-30 moves, trouble is $10 moves are useless with bitcoin as you always get swamped by the fees...

I was thinking this too but it might be possible to use Google trends data or similar to work out if searches for the coin spike at that time. If they do, it's more likely to have fundamentals imo but I'm not entirely sure how you'd link the two anyway other than a higher volume moves a coin up on the list of coins on a lot of exchanges.
Researchers can use historical data (including Google trend) to a certain extent, but it should not be used for future prediction/projection/forecasting with 100% confidence. I mean, you will often find predictions differ from reality.

In the mentioned paper, the researcher found correlations (not causation) between the absolute value of price change and volume. It means when the trading volume goes up, the price can either goes up or down. OP suggests that the x% volume -> x% price (causality), which is tempting, but I'd rather trust the good old 1987 paper.

Anacdotally for me, an external manipulation factor (either a person or a change of fundamentals) normally peaks the volume at the same time the price moves, this has often been a second long candle that pumps a coin really hard.
legendary
Activity: 4466
Merit: 3391
The easiest way to determine the effects of buying or selling on price is to look at an order book. The order book is the description of how much buying or selling it would take to move the price. The downside is that it describes the instantaneous changes in price, but not changes to the equilibrium price.
hero member
Activity: 1834
Merit: 759
Maybe you could check old altcoin pump and dump data and craft a model around them?

Here's one instance of $27k volume being able to pump a random alt 6800%. The missing variables are probably publicly available somewhere. Compile enough of these instances and you may be able to come up with something. Just a thought.
copper member
Activity: 2324
Merit: 2142
Slots Enthusiast & Expert
I was thinking this too but it might be possible to use Google trends data or similar to work out if searches for the coin spike at that time. If they do, it's more likely to have fundamentals imo but I'm not entirely sure how you'd link the two anyway other than a higher volume moves a coin up on the list of coins on a lot of exchanges.
Researchers can use historical data (including Google trend) to a certain extent, but it should not be used for future prediction/projection/forecasting with 100% confidence. I mean, you will often find predictions differ from reality.

In the mentioned paper, the researcher found correlations (not causation) between the absolute value of price change and volume. It means when the trading volume goes up, the price can either goes up or down. OP suggests that the x% volume -> x% price (causality), which is tempting, but I'd rather trust the good old 1987 paper.
copper member
Activity: 2856
Merit: 3071
https://bit.ly/387FXHi lightning theory
First of all, you should define the term "significant." Is it 10%, 20%, 30% etc.?
Second of all, you can't create a robust formula for it because each coin has different fundamentals. Well, assumed that the coins have fundamentals, not just shitcoin without any development.
Finally, the relationship between the price change and volume is a correlation and not causation.

Karpoff, J. M. (1987). The Relation Between Price Changes and Trading Volume: A Survey.
https://sci-hub.tw/10.2307/2330874

I was thinking this too but it might be possible to use Google trends data or similar to work out if searches for the coin spike at that time. If they do, it's more likely to have fundamentals imo but I'm not entirely sure how you'd link the two anyway other than a higher volume moves a coin up on the list of coins on a lot of exchanges.
copper member
Activity: 2324
Merit: 2142
Slots Enthusiast & Expert
First of all, you should define the term "significant." Is it 10%, 20%, 30% etc.?
Second of all, you can't create a robust formula for it because each coin has different fundamentals. Well, assumed that the coins have fundamentals, not just shitcoin without any development.
Finally, the relationship between the price change and volume is a correlation and not causation.

Karpoff, J. M. (1987). The Relation Between Price Changes and Trading Volume: A Survey.
https://sci-hub.tw/10.2307/2330874
legendary
Activity: 1904
Merit: 1277
It might also be useful - although probably fairly difficult - to include some measure of how stable a coin's price will be given the magnitude of any recent price change. If for example a coin rises in price by 20% in a few hours, then it is perhaps fairly unlikely to remain at that new price. As I say though, difficult to devise a formula.
copper member
Activity: 2856
Merit: 3071
https://bit.ly/387FXHi lightning theory
2 * .8x *  10% price change where x is each 10% interval.

Doesn't 2*0.8x*10% just simplify to 0.16x% ?
I'm kind of surprised it's that straightforward, but I suppose you are taking an overall trend.
Are you saying the price change is linear with respect to x, so it charts as a straight line? Or am I being stupid (quite likely) and missing something?

I thought it was just an example, there could also be a separate set for X such that f(X) = current_volume * k?



I think volume change might have little affect on the actual price compared to depth of orders... You could instead look for an exponential run up in volume maybe?
legendary
Activity: 1904
Merit: 1277
2 * .8x *  10% price change where x is each 10% interval.

Doesn't 2*0.8x*10% just simplify to 0.16x% ?
I'm kind of surprised it's that straightforward, but I suppose you are taking an overall trend.
Are you saying the price change is linear with respect to x, so it charts as a straight line? Or am I being stupid (quite likely) and missing something?
member
Activity: 518
Merit: 23
★Bitvest.io★ Play Plinko or Invest!
Wondering if anyone out there has done research on this. We're trying to figure out the smallest market cap coin we can give people access to on our paper trading platform while still accurately simulating market conditions.

So far, our VERY ROUGH model (for coins within a certain volume range that we can't share yet) is that every incremental 10% volume traded above average volume leads to a 2 * .8x *  10% price change where x is each 10% interval.

So 10% above average = 2*.8*.1 = 16% price movement, 50% above = 2 * (.8*5) * .1 = 80% price movement. Has anyone else looked into this?

Volume does Significant change to an alternate coins price since it can control the Coins price. The movement might depend on how it will get distributed since if people are seeing that specific alternate coins has their prices rising, then more people would buy it. Some people HODL their coin then wait for at least they have a significant volume amount before selling them for greater profits.
newbie
Activity: 20
Merit: 1
I'd look at the order book and check the cost it'd take to move it up in price by a few %...

If you can kick-start a move you can at least arbitrage with it.



This is a great strategy! Unfortunately since we're just a paper trading platform, we're looking for more of a one-size-fits-all solution without constantly syncing the entire orderbook of each asset. But we may end up doing something like this if all else fails.
copper member
Activity: 2856
Merit: 3071
https://bit.ly/387FXHi lightning theory
I'd look at the order book and check the cost it'd take to move it up in price by a few %...

If you can kick-start a move you can at least arbitrage with it.

newbie
Activity: 20
Merit: 1
Wondering if anyone out there has done research on this. We're trying to figure out the smallest market cap coin we can give people access to on our paper trading platform while still accurately simulating market conditions.

So far, our VERY ROUGH model (for coins within a certain volume range that we can't share yet) is that every incremental 10% volume traded above average volume leads to a 2 * .8x *  10% price change where x is each 10% interval.

So 10% above average = 2*.8*.1 = 16% price movement, 50% above = 2 * (.8*5) * .1 = 80% price movement. Has anyone else looked into this?
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