Today, there are around 21 000 cryptocurrencies listed on CoinMarketCap. With such a large number of coins to choose from, the crypto market can be a little overwhelming for newcomers. Technical analysis and historical data are useful for the trading of any asset class, including digital assets. In any case, crypto trading tools are unavoidable for a market watcher, portfolio balancer, or even novice traders who require assistance in understanding the crypto world.
Cryptocurrency traders can no longer function without being aware of what is happening on cryptocurrency exchanges. Investing can be dangerous for anyone, even experienced investors. Access to data, such as Market data API, has made it easier to invest in the right stocks.
Anyone who trades cryptocurrencies and wants to succeed in the market requires a good platform. It is difficult to capitalize on the best opportunities in the cryptocurrency market without reliable data. Professionals always make use of the best resources available.
The most important first step in developing a trading platform is gaining access to clean, granular, and high-quality data. What are the primary resources, and which ones are most helpful with cryptocurrencies? This article provides an overview of market data that will assist you in building trading products. This guide provides an overview of the most important market data functionalities for cryptocurrency trading. Check it out.
Market data API for technical analysis
Technical analysis assists traders in understanding the market cycle and a variety of other parameters. In some ways, it assists beginners in better understanding the fundamentals of cryptocurrency trading or trading in general.
Data collection is a difficult task, beginning with the difficulties of connecting to dozens of exchanges. Because no two cryptocurrency exchanges are alike, each exchange necessitates a unique integration. Once the integration is complete, developers must maintain the connection 24/7 and set up sophisticated monitoring infrastructure to avoid downtime.
Even after a connection is established and data is collected, the problem of organizing and storing the data remains. It takes a long time to clean data, identify gaps, correct inaccuracies, and so on.
CoinAPI collects data from multiple exchanges and calculates an average rate as CoinAPI because each exchange has its price, so we must aggregate data to get a single price. This is difficult because you must go through other currencies, which requires complex algorithms and several iterations on CoinAPI’s end to provide our users with the most accurate price exchange.
We remove the need for our customers to process and aggregate data because doing so is difficult and time-consuming. Data can be anomalous, and the quality varies; both must be taken into account when aggregating information.
Get to know volume at the price
You are already aware of the significance of volume in operations. There are two types of volume: offer volume and turnover volume. Both types contribute to the liquidity of a cryptocurrency. When it comes to turnover, the value of the total number of shares traded is used. Turnover demonstrates genuine interest: someone bought or sold at a specific price.
With this information, you can identify traders who are positioned at specific prices. The higher that positioning, the more powerful the price determination. This can be interpreted in several ways, the most basic of which are supports and resistances. As a result, Volume At Price can identify points where there was a high volume of trading. In a highly contested area, such as a specific point, it is possible to mark based on support or resistance.
Check Real-Time Market Data
Access high-quality streaming, real-time, delayed, and historical market data for global cross-asset securities, seamlessly integrated into your existing workflow.
Build Backtesting Engine
Historical analysis in finance examines the viability of a trading strategy by examining how it would perform based on historical data. In other words, it examines historical data to determine how a strategy would have performed. If backtesting yields positive results, traders or investors can take the strategy a step further and implement it in a real-world setting.
Backtesting almost always necessitates the use of tick-level data obtained directly from exchanges. You should never test a strategy on aggregated data because it does not reflect real-world market conditions. Shrimpy needed tick-level exchange-pair data, which Kaiko specializes in, to develop their backtesting feature.
Customers run their backtesting engines against CoinAPI’s historical database. They receive daily data dumps from Amazon Web Services, process the data to fit their existing structure, and then securely store it for future use. The data from CoinAPI is then made available via permission APIs. Customers can use the APIs to access order book snapshots to calculate exact trades when simulating backtests. When a customer requests a specific period, exchange, or trading pair, CoinAPI retrieves the data from the database and serves it to the customer, allowing them to easily perform a backtest.
Backtesting orders available on each crypto exchange at the time of a simulated trade are one feature of CoinAPI’s backtesting engine. CoinAPI’s clients can calculate the exact trades that could have been placed when a portfolio rebalance occurs using these order book snapshots. When simulating complex rebalancing strategies, high precision is required, which is why access to the most granular data available is critical.
The granular Cryptocurrency data provided by CoinAPI is ideal for strategy backtesting. We have the industry’s most comprehensive order book data, which is required for accurately simulating a trade. Because our data is normalized and asset taxonomies are standardized across exchanges, it can be easily ingested into any backtesting system.
Furthermore, we offer unrivaled support through on-call slack channels that provide instant access to developers, support, and the business team. We create custom data plans for all of our enterprise clients and are eager to collaborate with you to determine your precise data requirements.
Identify Profitable Strategies
So, how would a backtest on CoinAPI’s platform using order book data work? The following precise data is required for the majority of backtests. This strategy could have resulted in a loss of access to order book data for backtesting was not available.
Trading entails searching for the best buying and selling opportunities, and the asset must have enough offers in the book to do so. The book essentially presents the market’s buy and sell offers. They are cryptocurrency traders who want to buy or sell a cryptocurrency at a specific price. As a result, liquidity can be identified.
The book explains where you can find the most impactful cryptocurrency offers. Consider cryptocurrencies such as bitcoin. “Round” numbers are usually very important because they define prices. As a result, there is frequently an accumulation of offers (many traders want to sell or buy at these points), which are areas of impact.
What trading products you can build with market data API?
Crypto Trading Bots
Crypto trading bots are an essential component of the market. Bots cut down on the amount of time you need to spend in front of a computer. They follow the rules and carry them out when certain parameters are met. At the same time, some strategies (most notably scalping) cannot be executed manually.
Remember that a trading bot automates your trades, making advanced strategies faster, easier, and more convenient to run.
A charting tool allows you to visualize the market by using various trading indicators and trend lines. Practicing trading indicators and trend lines can help you improve your technical analysis skills (TA). Good TA skills will allow you to stay ahead of the competition and win big. The following are some of the best charting tools.
If you don’t believe the negative news articles claiming that Bitcoin transactions are declining and the network is charging excessive fees, you can check the data for yourself. There are crypto tools on the market that will tell you how active the Bitcoin network is.
Portfolio Management Tools
Portfolio management tools assist you as an investor in managing your investments, especially when your assets are spread across multiple wallets and exchanges. It can be difficult to keep track of the performance of your various investments at times, but it becomes easier when you can see them all in one place. Portfolio management tools make it simple to keep track of your investments. Let’s take a look at some of them.
Data Analytics Tools
Various data analytics tools are useful when analyzing blockchain data. These tools provide the data, research, on-chain indicators, and metrics required to make informed trading and investment decisions. Let’s look at a few of these data analytics tools.
Why Data is the Core of Your trading platform
High-quality trading data is critical for risk management in financial markets. The quality of data used in a trader’s models is critical to their success. Many traders will accept low-quality data that is freely available from a plethora of data aggregation websites. However, without access to granular trade and order books, these traders are likely to face problems in the long run.
The more you know, the more you grow
As cryptocurrency markets mature, more traders recognize the value of data but lack the resources to access and work with it. Shrimpy has more time to build the tools that any trader needs to backtest a strategy with minimal effort by outsourcing data management to Kaiko.
Market data API can assist you in learning more about specific cryptocurrencies and identifying lucrative trading opportunities. More importantly, they will assist you in expanding your knowledge and becoming a more knowledgeable trader.