Trading signals are up-to-date, trusted, exclusive data only available on Coinbase.com and are meant to help our customers independently create and manage their own crypto strategy. Our goal is to provide accurate, objective measurements of cryptocurrency usage based on the aggregated and anonymized activity of millions of Coinbase customers. These insights are only available to customers signed in to Coinbase — and they are the first of their kind in crypto.
These new signals, which are in addition to the typical market data we already provide, will power a deeper understanding and comparison of cryptocurrencies and their communities so Coinbase customers can think beyond price when building their crypto portfolio.
Trading signal: Top holder activity
What it is: The top holder activity signal is the percentage of Coinbase customers with large balances of an asset (top 10%) who have net increased (bought) or decreased (sold) their positions in that asset through trading over the last 24 hours. This is updated approximately every 2 hours.
Why it’s important: While we can’t predict what crypto prices will do, we can tell you how the largest holders have recently traded with the top holder activity signal.
Trading signals: Typical hold time & Popularity on Coinbase
What they are: The typical hold time signal is the median number of days an asset stays in a Coinbase customer’s account or vault before it’s sold or sent to another address or wallet. The popularity on Coinbase signal is a ranking (out of all tradable assets) of how many customers hold a particular cryptocurrency. These signals are updated approximately every 24 hours.
Why they’re important: For those customers who want to better understand what the average Coinbase customer does, we’re providing data on hold times and popularity. Keep in mind that Coinbase has a wide diversity of customers, with a variety of factors driving their asset hold times and which assets they find interesting.
Trading signal: Price correlation
What it is: The price correlation signal measures how cryptocurrency prices have moved in relation to each other. This is updated approximately every 24 hours.
High positive correlation means those assets’ prices have tended to move in the same direction. High negative correlation means those assets’ prices have tended to move in the opposite direction. Low or no correlation (around 0%) means the assets’ prices haven’t tended to be related.
Why it’s important: Price correlations can help you assess the historical diversity of your portfolio and assess potential risk exposure. For example, if you want to increase your exposure to potential BTC-related price movements, you could buy cryptocurrencies that are highly correlated to BTC. And if you wanted to hedge your bets against BTC-related price movements, you could buy crypto with a high negative correlation. Further, you could make uncorrelated bets with a crypto that has no relationship with BTC.
Keep in mind that regardless of the data, price correlations are historical and not predictive of future correlations.
When considering these trading signals and other market data provided by Coinbase, please keep in mind that they are not and should not be considered investment advice, which Coinbase does not provide. Always make your own independent assessment of whether any particular investment or investment strategy is right for you, your risk tolerance, and financial means, before entering into a transaction. When in doubt, consult with a financial professional.
We think trading signals, backed by verified transactional data, are an important step to raising the level of trust in the cryptoeconomy. Coinbase customers can now use these signals to suit their needs.
