This report provides an in-depth analysis of Bitcoin and Ethereum market performance from April 25 to May 12, using a multi-dimensional approach that incorporates on-chain and derivatives indicators such as long-short ratios, open interest, and funding rates to illustrate capital sentiment and trend evolution. The quantitative section examines the application of the Dense Moving Average Breakout Strategy in the ETH/USDT market. Through systematic parameter optimization and backtesting, the strategy demonstrated solid performance in trend identification and risk control, consistently outperforming a simple ETH buy-and-hold approach and offering a practical framework for quantitative trading.

Key Takeaways:

• BTC rose approximately 34%, ETH surged over 60%: BTC approached 105,000 USDT, while ETH climbed to nearly 2,600 USDT, signaling overall market strength. ETH showed higher volatility than BTC, indicating more intense short-term capital rotation and heightened market trading activity.
• Divergence in long-short ratios signals growing sentiment split: BTC’s long-short ratio declined amid volatility, suggesting weakening bullish momentum at higher levels. ETH’s long-short ratio fluctuated more sharply, reflecting pronounced market sentiment divergence.
• Dense Moving Average Breakout Strategy delivered strong performance with over 127% annualized return: In the ETH/USDT 2-hour backtest, the strategy achieved an annualized return of 127.59%, far outperforming ETH’s buy-and-hold return of -46.05% during the same period. It showed excellent trend-following and drawdown control, performing steadily in both volatile and reversal phases.
• Market outlook and strategic insights: BTC and ETH posted strong gains, with ETH outperforming BTC. However, sentiment remains cautious and follow-through buying is limited. The derivatives market saw alternating liquidations of long and short positions, reflecting increased divergence under high leverage. Capital momentum and price action have yet to align, emphasizing the importance of risk management and timing. The Dense Moving Average Breakout Strategy, which achieved a 127.59% annualized return in ETH/USDT 2-hour backtests, is well-suited for current conditions. Future improvements may focus on optimizing mid- to short-term parameter combinations to unlock more stable alpha from trend-following strategies.

Explore today’s highlights → ETH Rebounds Strongly, Dense Moving Average Breakout Strategy Achieves 127% Annualized Return｜Gate Research

Gate Reach is a comprehensive blockchain and cryptocurrency research platform that provides readers with in-depth content, including technical analysis, trending insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

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Gate.io Team
May 15, 2025

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