That's a grey-scale or gray-scale sequence. You can determine the direction easily... that's one of the reasons they use it.

The mechanism you describe is how automotive radios are typically done these days. No need to worry abut someone turning the volume up full so that the speakers blow out when someone starts the car... Whereever the dial is when it powers up... is its off or minimum position.

A quick way to encode yor problem is to use a table mapping the previous dibit (2 bits) with the current dibit. You could shift these together to create 4 total bits associated with sixteen possible combinations. These are mapped against 16 single binary values for up or down. A two byte table could be used with your algortihm or you could quickly map the states to 16 bytes, each being a up/down indicator (somewhat wasteful but ok)

If there is a more clever algorithm... I'll ponder it later.

-Jay C. Box