The effect of the indicator selection on investor strategies in cryptocurrency markets and application on crypto-assets

This study comparatively examines the performance of technical indicators suitable for different market conditions in cryptocurrency markets. In the first stage, the market was classified according to its trend direction using the Average Directional Index (ADX), and the indicators Relative Strength Index (RSI), Stochastic Oscillator, Rate of Change (ROC), and Commodity Channel Index (CCI) were tested under sideways market conditions. Based on cumulative return performance, the RSI indicator achieved the highest result. In the second stage, trend market indicators Exponential Moving Average (EMA), Moving Average Convergence Divergence (MACD), Supertrend, and Parabolic SAR were evaluated, and the highest cumulative return was obtained from the MACD indicator. In the third stage, the RSI, which showed the best performance in sideways markets, and the MACD, which achieved the best performance in trending markets, were combined through ADX filtering to design a hybrid strategy. This hybrid strategy was applied to Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) across different timeframes (4-hour, daily, weekly). Finally, the outputs of the developed hybrid strategy were compared with macroeconomic indicators such as the US Dollar Index (DXY) and the 10Y–2Y Treasury yield spread to analyze its alignment with market regimes. The findings reveal that selecting indicators according to market conditions and employing hybrid strategies play a significant role in enhancing investment performance.