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,
In this edition of our newsletter, set between April 15 and April 22, 2024, we dive deep into the evolving narrative of the cryptocurrency markets. We’ve seen significant movements, innovative updates, and strategic shifts that all play into how we shape our portfolio for the upcoming period.
Here are the top highlights from the crypto space this week:
- BTC Halving: The highly anticipated Bitcoin halving event, occurring once every 4 years, has captured the attention of the crypto community, marking a rare and pivotal moment. Mining rewards were slashed, and optimism rose.
- Narrative Landscape: Despite a market downturn in April, Ordinals have showcased strong performance, heightened by the buzz surrounding Runes. Amidst a market decline, Runes have emerged as an exciting prospect for speculative activities.
- Bitcoin Narrative: Runes are strengthening the Bitcoin DeFi narrative, with various Bitcoin L2 solutions, DEXs, marketplaces, and DeFi building blocks being established to foster a robust DeFi ecosystem within Bitcoin. Furthermore, there has been a surge in venture capital funding pouring into the Bitcoin ecosystem. In a significant development, last week witnessed BTC’s 90-day correlation with the Dollar Index plummeting to a negative 0.24, marking its lowest level in over a year. This shift underscores the evolving landscape and dynamics within the crypto market.
Market Overview
The Fear and Greed Index ranges from 65 to 73, indicating optimism is returning to markets after the crash from last week.
High Time Frame (HTF) Analysis
The higher timeframe (HTF) market state suggests an Altcoin Downturn bottoming phase, with recommendations to prepare for closing short positions and taking long positions.
Low Time Frame (LTF) Analysis
The lower timeframe (LTF) market state also indicates an Altcoin Downturn bottoming phase, with similar recommendations.
Market Momentum
The momentum for Bitcoin (BTC), Ethereum (ETH), and Altcoins is generally bearish, suggesting a bearish market and decreasing momentum. The momentum phase is bearish, and the momentum strength is not over-extended.
Whale vs. Retail Insights
For BTC, whales are generally decreasing their exposure compared to retail investors. For ETH, however, whales are more exposed than retail investors.
For Altcoins, big holders are oscillating between increasing and decreasing exposure. These mixed signals don’t give us any edge right now. There’s no easy game in the altcoins markets.
Funding Rate Insights
The extreme positive funding rate for coins is generally low or zero, indicating normal funding rates and a healthy market. The extreme negative funding rate percentage for coins is non-zero on several days, suggesting potential market bottoms.
Overall, the data suggests a bearish market sentiment with decreasing momentum but also hints at potential bottoming and reversal signs in the Altcoin market. ETH is favored by whales compared to retail, while BTC and Altcoin exposure is decreasing for big holders.
Funding rates indicate some potential market bottoms, but the overall sentiment remains greed-driven.
BTC Analysis
Based on the recent bearish movement followed by the price holding above the key level of $60,000, and considering the new support and resistance levels provided:
The market has shown resilience after testing the $60,000 support, indicating bullish strength in the current phase. Key supports are now identified at $64,300 and $60,000, with the latter acting as a crucial level that held during the recent bearish movement.
On the resistance side, $68,600 and $72,000 are highlighted as significant barriers for further upward movement. Between $64,300 and $68,600, the market is likely to encounter choppy price action as traders navigate this range.
Traders should pay close attention to how the price behaves within this choppy area, as a breakout above $68,600 could signal a bullish continuation toward the $72,000 resistance.
Conversely, a failure to hold above $64,300 might lead to a retest of the $60,000 support level.
Overall, the market appears to be in a consolidation phase, with key levels identified for potential trading opportunities. Traders should remain vigilant and adapt their strategies accordingly within the identified support and resistance zones.
Key Resistances:
While prices have improved, $60,000 remains the key level. Prices need to hold for a bullish continuation. But two large opposing forces are making it difficult for markets to move one way or the other. There is significant buy pressure from Binance, while on Coinbase holders are selling.
Key levels:
- Bellow $64,300 = weak market
- Above $68,600 = strong market
- Between both = no man’s land
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, but at the moment markets remain uncertain.
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
Sign up for our AI Powered Newsletter
Would you like to better understand and eventually beat the markets?
AQTIS is delivering this institutional-grade Market Insights Newsletter straight into your inbox, for free! ▶️ Subscribe here!
