What is Quantor?
Quantor is an LLM that gives us an overview of what is happening in the crypto markets.
How does it work?
We have built multiple models to measure the state of the market for BTC, ETH, and an
Altcoin Index. For each model, we get a score and our system gives us an insight based on a decision tree system.
Then, we feed our Quantor LLM with the current and past data and the current and past insights.
Each week Quantor produces a report, and each week we will be sharing that with you.
Below you’ll find this week’s summary.
The Week’s Crypto Ecosystem Highlights
Dear Aqtivators,
Our latest data comes from April 13–14, 2024 with a strategy for portfolio optimization synced with fresh insights concerning the cryptocurrency landscape.
Let’s take a glance at The Macro View Update:
Macro Lens: Ongoing geopolitical events could sway crypto prices. Iran’s cessation and potential Israeli reaction are key players. The intensifying Middle East conflict can impact Bitcoin and general asset prices. Dollar-Cost Averaging with stablecoins might be a balanced strategy during turbulent times.
Crypto Market: Despite market dips, the strong fundamentals of crypto are unyielding, and the upcoming halving event may stimulate a bullish uptick.
Institutional News: Positive winds blow in Hong Kong with Bitcoin and Ether ETF’s set for approval.
Macro Scope: A YoY US inflation leap of 3.5% with persistent core inflation shadows monetary moves. Gold’s price skyrocketing may indicate lower real rates.
Strategy Outlook: Bitcoin could act as a safety net during geopolitical turmoil and is anticipated to experience accelerated growth post the initial slump.
Market Overview
Despite some fluctuation, the overall sentiment on the Fear and Greed Index remains optimistic, with a reading of 74 on the latest date of April 15, 2024.
High Time Frame (HTF) Analysis
The status suggests that the downturn of Altcoins is bottoming and it may be time to prepare to close shorts and potentially take longs. Although maintaining a focus on Bitcoin (BTC) is still recommended, Ethereum (ETH) is beginning to show signs of recovery, which traders should keep an eye on.
Low Time Frame (LTF) Analysis
Against Altcoins, on a low time frame, BTC still displayed higher strength, aligning with our continued focus on BTC. However, ETH and Altcoins are approaching a potential reversal stage, with the recommendation to prepare to close shorts and take longs.
Market Momentum
Compared to the previous bullish momentum, the latest data signals a bearish market.
Whale vs. Retail Insights
While Bitcoin witnessed a slight drop in exposure from smart money, it’s evident that smart money is still leaning heavily on ETH and Altcoins.
Funding Rate Insights
The funding rate for Bitcoin is normal suggesting a neutral market sentiment. However, for Altcoins, the funding rate is extremely negative, which could indicate a potential for a market bottom.
In conclusion, while BTC remains our strong focus, potential market changes could signal new opportunities in ETH and Altcoins. The current market trends indicate a bearish momentum, but with ETH and Altcoins nearing the bottom, a reversal phase may soon be approaching.
BTC Analysis
Based on the 1H BTC/USDT chart, the market appears to be in a prolonged consolidation phase.
The recent price action suggests a potential fake-out or bear trap around the $69,000 level, where over-leverage signals were seen, followed by a swift rejection. This could indicate short-term selling pressure and a potential retest of the $65,000 support.
However, the presence of white healthy market signals around $65,000 suggests there could be a buying interest in this area, potentially leading to a consolidation or a relief rally.
For a bullish reversal, the market would need to break above the $70,000 resistance and the descending trendline. A decisive close above $72,000 could invalidate the bearish bias and potentially signal a trend change.
Conversely, a breakdown below $61,110 could accelerate the downtrend, with the next major support around the liquidity pool at $62,000 — $63,000.
Overall, the market appears to be in a consolidation phase with a bearish bias, as indicated by the lower highs and resistance at the over-leverage levels. Traders should closely monitor the key support and resistance areas, as well as the healthy market signals, for potential trading opportunities while managing risk accordingly.
Key Resistances:
- $68,639: This level has acted as a significant resistance area, with multiple rejections from the highlighted yellow signals (over-leverage events).
- $70,000: A psychological resistance level aligned with the descending trendline resistance.
- $72,000: A major supply zone where the recent downtrend initiated after hitting extremes in over-leverage (yellow signals).
Key Supports:
- $65,000: An immediate support zone that has seen some buying interest recently, marked by white healthy market signals.
- $63,000 — $62,000: This area around the liquidity pool could provide a stronger support if tested.
- $61,110: The recent swing low represents another critical support to watch for potential downside targets.
Short-term Insights:
Our model based on open interest and leverage showed there was a key point over leverage before prices collapse over the weekend. However, the liquidity pool of BTC seems set at around $61,000, which the price bounced off after the sudden fall.
In lower timeframes, we can see a possible bearish flag and no too much activity on the books.
A Coinbase entity was trying to hold the price with large buys at $67.8k, at $65k and $60k. We can see that in the orderbooks as green horizontal lines. The orderbooks are a bit bearish right now, but a short squeeze can move us higher.
Right now, we see a resistance above 67k, the red horizontal line.
Key levels:
- Above $60k, we look for an accumulation phase.
- Above $68k, we look for bullish continuation.
Optimized Portfolio Allocation:
Based on the latest market data and conditions, we have optimized our portfolio allocation strategy as follows:
- Momentum: 30% Allocation
- Breakout: 20% Allocation
- Trend Following: 40% Allocation
- Mean Reversion: 10% Allocation
This optimized allocation strategy aims to capitalize on the potential trend reversals and breakouts while maintaining a diversified portfolio with exposure to various market phases.
The increased allocation to momentum strategies (30%) reflects our commitment to capturing the potential upside in the early stages of a market recovery.
TLDR:
The crypto market continues to show signs of a potential bottoming phase, with BTC and ETH leading the charge.
Our optimized portfolio allocation focuses on trend following strategies (40%), momentum (30%), breakout (20%), and mean reversion (10%), positioning us to capitalize on emerging opportunities and potential trend reversals.
Stay tuned for our future newsletters, where we will continue to provide you with the latest market insights and strategic portfolio allocations.
Trade safe,
The Quantor
AQTIS Investment Management
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