You can build a Hidden Markov Model (HMM) using the slopes of Bitcoin’s growth to identify and predict three regimes: bullish, transition, and bearish. In preliminary tests, this approach can classify the regime with around 90% accuracy.


Below is a link to a Veritasium video that explains how Hidden Markov Models work and why they are powerful tools for prediction problems.
HMMs are widely used in quantitative finance; notably, variations of this technique were reportedly among the methods employed by Jim Simons’ Medallion Fund, one of the most successful trading strategies in history.
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