I have been looking at trading volume on Mirror in relation to equity money flow over the past several months.
What I am noticing is, which you could probably assume, on big trading volume days in mirror… equity market money flow is low(typically bearish move in equities). And on big money flow days in equity markets(typically bullish move in equities)… mirror trading volume is low.
From my perspective I would like to think trading volume would be correlated but it is effectively opposite of each other.
Anyone have an opinion as to why this may be?
Have you looked at correlations between crypto market volumes and Mirror trading volume instead? I think that since most Mirror users come in from crypto world, crypto trading volumes and price swings would have a much larger impact on Mirror trading volumes than tradfi volume would.
The correlation is not inverse. They essentially mirror each other comparing mirror transaction volume to crytpo transaction volume.
We are mirroring equity assets here so I would imagine people would be buying mirrored assets on a bullish move in equities but they are not. Why would that be?
You basically just answered your own question. Mirror protocol transaction volumes are driven by crypto market activity, yield farmers, etc.
Transaction costs are too high for short-term trading strategies, long-term trading strategies are more profitable when managed as yield farming strategies rather than as a synthetic version of trad-fi strategies.
people invest in mirror stocks to farm MIR. if crypto market is strong and MIR price is high it attracts more farmers. if MIR price is low, some farmers leave to deploy capital elsewhere
Thanks for sharing. I am new to yield farming so just trying find a pattern here and understand the price action.