Indicators are compact summaries of price, volume and positioning. Each one answers a narrow question. Knowing the formula, and what question it answers, is what separates using indicators from being used by them.
- Trend indicators (SMA, EMA) smooth price; momentum indicators (RSI, MACD) measure speed; volatility indicators measure range.
- Every indicator is derived from the same price history, so stacking many of them adds less information than it seems.
- Default settings like RSI 14 or Bollinger 20/2 are conventions, not laws.
- Derivatives indicators such as funding and open interest describe positioning and leverage.
Trend indicators
Simple moving average (SMA)
SMA_N = (sum of the last N closes) / N
Equal weight on every day in the window. Smooth and slow. Common windows are 20, 50 and 200 days.
Exponential moving average (EMA)
EMA_t = α × P_t + (1 − α) × EMA_{t−1}, α = 2 / (N + 1)
Recent prices weigh more, so the EMA turns faster than an SMA of the same length, at the cost of more false signals.
Momentum indicators
Rate of change and relative return
Return_N = P_t / P_{t−N} − 1
Relative return vs BTC ≈ Return_N(asset) − Return_N(BTC)
The simplest and often most useful momentum measure. DUKOIN’s Momentum component uses 7-day and 30-day returns relative to BTC.
RSI (Relative Strength Index)
RSI compares average gains with average losses over N periods, conventionally 14, using Wilder’s smoothing:
gain_t = max(P_t − P_{t−1}, 0) loss_t = max(P_{t−1} − P_t, 0)
AvgGain_t = (AvgGain_{t−1} × 13 + gain_t) / 14
AvgLoss_t = (AvgLoss_{t−1} × 13 + loss_t) / 14
RS = AvgGain / AvgLoss
RSI = 100 − 100 / (1 + RS)
The first averages are seeded with a simple mean of the first 14 gains and losses. RSI above 70 is labeled overbought and below 30 oversold. In persistent trends RSI can stay above 70 or below 30 for long stretches, so these readings describe stretch, not reversal.
MACD
MACD line = EMA_12 − EMA_26 Signal line = EMA_9 of the MACD line Histogram = MACD line − Signal line
A positive and rising histogram means short-term momentum is strengthening relative to the longer trend. Crossovers lag price, and in sideways markets they whipsaw frequently.
Volatility indicators
Realized volatility
r_t = ln(P_t / P_{t−1})
σ_daily = standard deviation of r_t over N days
σ_annual ≈ σ_daily × √365
Crypto trades every day, so 365 is used for annualization rather than the 252 common in equities. DUKOIN’s Risk resilience component uses inverse 30-day realized volatility; forecasts use an exponentially weighted variant explained in forecast methodology.
Bollinger Bands
Middle = SMA_20 Upper = SMA_20 + 2 × σ_20 Lower = SMA_20 − 2 × σ_20
Here σ_20 is the standard deviation of the last 20 closes. Narrow bands mean a quiet period; wide bands mean high volatility. A close outside the bands is unusual relative to recent history, but in strong trends prices can “walk the band” for days.
Average True Range (ATR)
True range is the largest of: today’s high minus low, the gap from yesterday’s close to today’s high, and the gap from yesterday’s close to today’s low. ATR is its 14-period Wilder average. It is useful for setting exit levels that respect an asset’s normal range.
Risk indicators
Maximum drawdown
Drawdown_t = P_t / max(P_0 ... P_t) − 1 Max drawdown = the most negative Drawdown_t in the window
Beta to BTC
β = Cov(r_asset, r_BTC) / Var(r_BTC)
A beta of 1.3 means the asset has historically moved about 1.3% for each 1% BTC move, on average. Beta is unstable over time and says nothing about asset-specific risk.
Liquidity indicators
- 24h volume: total traded value. DUKOIN uses its logarithm so that a few giant assets do not dominate comparisons.
- Turnover: 24h volume divided by market cap. High turnover means active trading relative to size; extreme turnover in a small asset can also mean speculative churn.
Derivatives indicators
These describe leverage and positioning in futures markets. DUKOIN does not have derivatives data connected yet; it is coming when a licensed provider is connected.
- Funding rate: periodic payments between long and short holders of perpetual futures that keep the contract price near spot. Persistently high positive funding means longs are paying up, a sign of crowded bullish positioning.
- Open interest: the total value of outstanding futures contracts. Rising open interest with rising price suggests new leveraged positions; a sharp drop often marks liquidations.
On-chain indicators
On-chain data reads the blockchain itself: active addresses, transaction counts, fees paid, exchange inflows and outflows, and the share of supply held by large wallets. These metrics can reveal usage and holder behavior that price alone cannot. They also need careful interpretation, since a single exchange reorganizing its wallets can look like a wave of activity. DUKOIN’s On-chain component is reserved in the Research Score and will be populated when a licensed provider is connected.
Which indicators feed DUKOIN
Trend uses 50-day and 200-day SMAs and the 20-day slope of the 50-day SMA. Momentum uses 7-day and 30-day returns relative to BTC. Liquidity uses log volume and turnover. Risk resilience uses 30-day realized volatility and 90-day maximum drawdown. Forecasts use exponentially weighted volatility. RSI, MACD and Bollinger Bands appear on charts as context, not as score inputs.
All of these indicators are derived from past data. They summarize conditions; they do not forecast outcomes. Combining several indicators built on the same price series can create false confidence. Use them alongside risk limits, not instead of them.
Using indicators well
- Pick one indicator per question: trend, momentum, volatility, liquidity.
- Know the default settings, and do not tune them until the past looks perfect. That is overfitting.
- Compare an asset with its own history and with BTC.
- Write down what reading would change your mind before you look.
See these concepts at work in the Opportunity Radar, or look up any term in the glossary tooltips across DUKOIN.
Put it into practice
DUKOIN shows these metrics live for ~250 assets, with sources and timestamps.
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