Fast Momentum (Solana)

Measures the momentum of an asset, calculated on shorter timeframes.

Predictive Strength

Limited

Solana historically had ▲ 14.66% 30 days returns when Fast Momentum was▆ High (0.6 - 0.8). It indicates higher than average expected returns.

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SOL Price with Fast Momentum

Factor Plot

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▆ Very Low▆ Low▆ Moderate▆ High▆ Very High

Our Methodology

Predictive Strength

Limited

Fast Momentum Factor is a measure of the momentum of an asset, calculated based on a range different lookback periods.

Potential Edge

Mechanical Feedback Loops From Leveraged Trading

Leveraged positions and stop-loss orders create cascading buy/sell pressure. For example:

Rising prices trigger margin calls on short positions, forcing liquidations that accelerate upward momentum
Falling prices similarly amplify downward moves via long-position liquidations
Fast Momentum indicators detect these feedback loops early, as they manifest in abrupt price-rate changes on intraday charts

Network Effects & Asymmetric Information Flow

Cryptocurrency valuations often depend on viral adoption cycles and developer activity spikes. Faster Momentum indicators:

Detect early accumulation phases before network growth becomes public knowledge
Identify "hot" assets benefiting from protocol upgrades or partnerships not yet priced in
Studies show crypto momentum strategies generate alpha in 7-30 day windows, aligning with typical news dissemination lags

Track this predictive factor on your dashboard

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Scatter plot - Fast Momentum and SOL 30 and 90 Day Average Returns

Backtest - Strategy Performance

Strategy Yearly Returns (CAGR)

139.66%

Sharpe Ratio

1.56

Max Drawdown

-68.28%

Beta

0.52

Volatility

72.35%

Alpha

0.33

To understand a predictive factors predictive power, we create a simple long/short strategy and simulate its past performance (with daily rebalancing):

100% Long when the predictive factor is close to 1, with a position size equivalent to the predictive factor value.
Flat when the predictive factor is close to 0, with a position size equivalent to the predictive factor value.

The strategy is rebalanced daily, on a continuous basis. There are 0.5% transaction costs applied on each position adjustment.

API

Get started by validating the historical performance of the strategy with our transparent code snippets.
Copy and paste the code snippets below into your Python environment or download the files below.