We are happy to announce that BANCA team is about to deliver CoinDr beta version in March. We have finished most of the research and analytics relating to the papers designed for beta version. Now we are working on the presentation of research and will also spend some time on testing.
In our past updates, we have introduced new research papers relating to deep factor research. In CoinDr beta version, those papers will be accompanied by two more papers, containing our proprietary research in behavioral finance. In those papers, we will apply similar study from traditional financial world to two important crypto sectors: NFT and Defi. We believe those two markets are among the two hottest sectors in cryptos today and both have their unique group of lovers. Those reasons make it especially interesting to give those markets a closer look.
To analyze the behavioral structures of a market, we have created a new index, The Fragility Index. It is constructed with three different statistics in traditional finance. The first is called Absorption Ratio. It measures the number of major factors people are currently looking at when trading in the specific market. The fewer factors they are looking at, the more likely the market might experience high volatility in the near future. The second is called Turbulence Index. It measures how far away the current market status is from normal, or historical average status. A larger Turbulence Index means a more volatile market because traders are likely behaving under more extreme sentiment. Both Absorption Ratio and Turbulence Index were first put forward by an old hedge fund to facilitate trading in the stock market. The third statistic is called fractal. It is originally an idea in geometry. It was discovered by Wall Street banks that it can be used to measure behavioral status of financial market. In a given market, there is a key fractal level. Once the fractal reading reaches the key level, the market trend is very likely to reverse.
We have used machine learning technology to understand how we can best measure the new index in NFT and Defi markets. Now we will design the paper so that the information be presented in the most user-friendly way.
- Research and development of CoinDr beta version have concluded.
- Designing of paper layout and testing have started.
- Bug-fixing of existing products and maintenance of database continue.
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