Price action in cryptocurrency market: range strategy

Gülçin Adıyaman, Mustafa Ay

Abstract

This study aims to examine the effectiveness of the Price Action-based range strategy in cryptocurrency markets. Specifically, the study evaluates the performance of the Order Block (OB), Breaker Block (BB), Imbalance (IMB) and Optimum Trade Entry (OTE) strategies applied to Bitcoin (BTC), Ethereum (ETH) and Binance Coin (BNB) across different time frames. Trading data were obtained from the TradingView platform using three different time frames, namely Higher Time Frame (HTF), Lower Time Frame (LTF) and Micro Lower Time Frame (MLTF). Descriptive statistical analyses were conducted using Microsoft Excel, while one-way Analysis of Variance (ANOVA) and Chi-square tests were performed in STATA to examine the relationships between trading strategies, cryptocurrencies, position directions, transaction duration, total R-values and time/profit scores. The findings indicate that the effectiveness of Price Action strategies varies according to cryptocurrency type, position direction and time frame. Among the analyzed strategies, OTE generally produced relatively stronger profitability and trading performance than the other strategies. In addition, LTFs, particularly MLTF, were associated with relatively more efficient trading performance than HTF transactions, suggesting that strategy effectiveness is influenced by market structure and trading horizon. This study is limited to three cryptocurrencies (BTC, ETH and BNB) and specific time frames. Transaction costs, commissions and external market factors were not considered. The findings are based on historical data and may not fully reflect future market dynamics. Future research can expand the scope by including different cryptocurrencies, additional technical analysis strategies and broader datasets. Incorporating machine learning or alternative econometric methods may also enhance the robustness of the results. The findings provide practical guidance for cryptocurrency traders by identifying the Price Action strategies and time frames associated with relatively stronger trading performance. The results may also assist investors in selecting appropriate entry models according to different market conditions. The increasing use of cryptocurrencies highlights the importance of effective trading strategies and financial literacy. This study contributes to a better understanding of cryptocurrency markets and supports individuals in making more informed financial decisions. Improved strategy selection can reduce financial losses and promote more responsible investment behavior. Furthermore, the findings may contribute to the development of educational programs and awareness regarding digital financial systems. Although technical analysis has been widely examined in cryptocurrency markets, empirical evidence on Price Action-based range strategies remains limited. This study contributes to the literature by providing one of the first comparative empirical evaluations of OB, BB, IMB and OTE strategies across multiple cryptocurrencies and time frames using statistical analyses.

Source: semanticscholar

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