Indicator Overview

The Volatility Fractals indicator evaluates volatility by analysing price ranges defined by fractal pivot points, comparing them to current bar fluctuations. Normalised and smoothed over a 5-period EMA, it produces an intensity curve that reflects clustering volatility. This indicator is crucial for identifying market regimes, as high volatility often signals impending price breakouts or reversals, while low volatility indicates calm, accumulation-driven phases. It provides a dynamic view of price structure, helping us anticipate shifts in market activity.

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

The indicator’s intensity curve rises above 20 (purple line) during high-volatility periods, often preceding significant price movements or trend changes. Values near 0 (white line) indicate low volatility, typically associated with consolidation or range-bound markets. Traders can use sharp increases in intensity to position for potential breakouts, while low-intensity periods may signal opportunities to accumulate. The purple gradient area visualises volatility strength, with darker hues indicating more intense activity. Investors can exercise caution during high-intensity spikes and build positions in low-intensity zones to capitalise on cyclical volatility patterns.