blockFrame Charting
rypto Technical Analysis
For C
HUSAM ABBOUD1
SÃO PAULO - OCTOBER, 2017
INTRODUCTION 2
TIME-FRAME CHARTING 2
BLOCK-FRAME CHARTING 3
EXAMPLES 4
ABSTRACT
Constructing a blockFrame chart as a graphical representation of a series of
crypto asset price movements over block heights, -instead of time- where the basic
graphical frame is one block, and the multipliers n blocks used for diverse graphical
chart frames.
blockFrame instead of timeframe charting, for a universe -Blockchain- where objective
time doesn't exist, and succession materialize only by mining new blocks.
1
Husam ABBOUD @drhus
Electronic copy available at: https://ssrn.com/abstract=3064115
blockFram Draft – Discussion Paper @drhus
I. INTRODUCTION
The means of analyzing securities, (commodity, stock, currency or crypto) commonly to
the prospect of making investment decisions; broadly divided into two main fields: 1)
Technical and 2) Fundamental analysis.
While fundamental analysis involves methods to evaluate securities by attempting to
measure and estimate the intrinsic value, and while often study everything from the
overall economy and industry conditions to the financial condition and management of
organization or whom in charge , Technical analysis employs an entirely different
approach; and instead of attempt to evaluate a financial instrument, it focuses solely on
the price movements in the market by means of studying statistics generated by market
activity and attempt to forecast instrument prices by the recognition of trends and
patterns, and mainly through the use of charts. The field of technical analysis is based on
three major assumptions:
1. The Market action -price- discounts everything
2. Price move in trends
3. History tends to repeat itself
In one way or another these core beliefs summarized as: “IT IS ALL IN THE CHARTS” and
has it’s roots back to 18th-century Japan and the use of candlestick charts on rice
contracts and are a part of Dow theory 2
II. TIME-FRAME CHARTING
Price chart are simply graphical representations of a series of price movements over
time, and common denominator that price is typically on the Y-axis and time is usually
on the X-axis, originally; charts were drawn by hand, nowadays most charts are
computerized.
Beside the charting techniques attempt to isolate price movements from everything else
-including time- like P&F3, Kagi4 and Renko5 charts, and despite all fancy incrementations
to chart analysis, the denomination of prices over time remain the base for all major
types of charting, from OHLC (Open, High, Low and Close) Bar charts to Candlesticks6, to
most common line charts whatever on the arithmetic or logarithmic scale.
These charts use frames of time like D Day and W weekly, M monthly (then H hourly and
its fractions has been introduced with tick data registration) these Time-Frames are
2
Daw Theory: https://en.wikipedia.org/wiki/Dow_theory
3
Point and figure chart: https://en.wikipedia.org/wiki/Point_and_figure_chart
4
Kagi Chart: https://en.wikipedia.org/wiki/Kagi_chart
5
Renko Chart: https://www.tradingview.com/wiki/Renko_Charts
6
Candlesticks: https://en.wikipedia.org/wiki/Candlestick_chart
/2/5/
Electronic copy available at: https://ssrn.com/abstract=3064115
blockFram Draft – Discussion Paper @drhus
understood and has a sounding for technical analysis in traditional finance where price
data of an instrument like “Stocks” has trading hours, and periodic -Monthly, Quarterly,
Yearly- cycles in which companies expected to report particular results and where
different asset classes like “commodities” has time-denominated cycles.
III. BLOCK-FRAME CHARTING
In blockchain universe there is no time, -no objective time- in the absolute
succession; but time is relativistic, it’s what needed to mint and find new block, time has
no particular value, the advance on this universe is about finding solution to a giving
problem of cryptographic computation, that cannot (and yet as far as of today’s
knowledge) be solved in a predictable time, and yes no matter how much -objective- time
is spent trying (or not) to find a solution, It is only when such a solution is eventually
found that the blockchain’s time advances by the mean of a new block of transactions is
added to the blockchain.
The blockFrame technique introduced as a replacement of commonly used timeframe
charting which brought from technical analysis of traditional financial instruments to a
universe “blockchain” where objective time doesn't exist in the distinctive sense, and the
advance, progress, and succession; take place with the creation of new blocks.
With blockFrames we’re registering series of prices over blocks, a canonical expression
of the price equation with block heights (ex. Each point, bar or candle represent one block)
Open in bar or candlestick chart is the price on new block timestamp, Close is next block
time-stamp, while high and low of price is during that block formation, a multiplier of
this basic unit (block) would be diverse frames
The frames represented by multipliers of n blocks, which can be according to difficulty
adjustment cycles, -and/or even block reward halving-, so if basic unit is one block B or
Block, then the bigger frame could be D or Diff the difficulty adjustment cycle of that
crypto, which in Bitcoin equivalent to 2016 B (network difficulty change every 2016 blocks
in Bitcoin) and then the much bigger frame unit is H or Halve represent halving cycles
which is 21e4 B (block reward halving happen 210,000 blocks) and anything in between as
of diverse frames are multipliers or fractions of the basic unit of frame B block
For bitcoin the B blockframe chart is something closest to current 10min time-frame
chart, the Diff unit is about 2 weeks, then you will have nB, 50B, 100B, 1000B etc
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blockFram Draft – Discussion Paper @drhus
IV. EXAMPLES
Disclaimer: due to a technical limitation the blockFrame chart below is build from 1min
bitcoin data feed, while each candle represent a block the opening and close is not exactly
the canonical price over the block timestamp but an approximation with +/- 59sec price
accuracy
Bitcoin Candlestick chart 1B blockFrame (each candle represent the prices over one
block)
Vs.
Bitcoin Candlestick chart of 10min timeframe for the same period
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blockFram Draft – Discussion Paper @drhus
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