What is the Market Depth Ratio (MDR)?

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2020-06-14 01:48

The Market Depth Ratio (MDR) was created by VantageCrypto and we believe will become a leading market indicator for market depth analysis along side other current mainstream indicators. The indicator is quite simple in that it is a single percentage representation indicating if there is more or less buying or selling pressure (bids or asks) and how much more or less of which one, relative to the assets total books.

For example a +25% MDR would indicate that the bids represent 25% more of the total order books than the asks. Where as a -10% MDR would indicate that the asks represent 10% more of the total books than the bids.

We further empower this solution by allowing users to see MDR based on the % of depth of books they have chosen and providing historic MDR in an intuitive and powerful signaling focused presentation.

MDR may provide different signaling for different assets based on an array of factors.  Dont expect the Bitcoin order books to signal the same as some low liquidity Ethereum Dapp.

We are charting out (and offering via API) the following MDR data sets

  • Real Time, updated by the minute
  • 1 hour average, updated by the minute
  • 3 hour average, updated by the minute
  • 24 hour average, updated by the minute

We offer short term averages as they are more appropriate in relationship to the usefulness of order flow data and provide the following value.

  • Smooth trendlines
  • Avoids impact from single anomolous market spike
  • Provides easier to decipher trends
  • Provides ability to track the crossing of multiple short term moving averages
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