Indicator Overview

The Momentum Coalescence indicator evaluates price momentum by combining: Fast Rate of Change (ROC), Slow Rate of Change (ROC), Volume delta, and Volatility Directional Bias (VDB).

It creates a normalised score to reflect the convergence of bullish or bearish forces in the market. This indicator is crucial for understanding shifts in market sentiment, as it captures both price and volume dynamics, helping investors identify potential trend reversals or continuations.

Dual-Ticker Comparison Logic

The ‘Crypto’ fields allow the indicator to operate in both absolute price and relative performance modes, making it suitable for outright positioning or pair-based allocation decisions.

• Single Crypto Analysis: If Crypto 2 is left blank, the indicator measures Crypto 1 against US Dollars. This mode is designed to identify statistically stretched rallies, deep mean-reversion zones, and long-term accumulation conditions where price trades multiple standard deviations below its historical average.

• Relative Strength and Ratios: When both fields are populated, the indicator automatically constructs a ratio of Crypto 1 divided by Crypto 2, such as ETH/BTC or SUI/SOL. The metric is then calculated on the ratio itself, isolating relative performance and stripping out broad market beta. This enables precise identification of overperformance, underperformance, and regime shifts between assets.

How To Use

Historically, positive coalescence scores above 0.5 often signal strong bullish momentum, coinciding with price rallies. Negative scores below -0.5 may indicate bearish pressure, often seen during corrections. You can use extreme readings to anticipate reversals: overbought conditions (high positive scores) suggest caution, while oversold levels (low negative scores) may present buying opportunities. The histogram or line, with a neutral line at zero, helps visualise momentum shifts.