Time-Series Momentum

Time-series momentum, also known as absolute momentum, involves looking at the historical performance of a single asset in isolation to determine whether to hold it or move to cash. If the asset's past return is positive over a defined lookback period, the strategy dictates holding a long position.

If the return is negative, the strategy shifts to a neutral or short position. This approach is highly effective for trend following in cryptocurrency markets, where strong bull and bear cycles are common.

It helps traders avoid participating in extended market downturns. By applying this logic across a broad universe of assets, traders can capture market-wide trends.

It provides a simple yet powerful mechanism for managing risk during periods of high uncertainty.