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,
We’ve assimilated all the current data from April 6–7, 2024. Our goal is to craft the perfect strategy that aligns with our insights, ensuring your portfolio is optimized for the modern crypto landscape. Let’s dive into the crucial market trends and adjust our allocation strategy accordingly.
The Macro View Update:
- In the US, fiscal dominance has replaced monetary dominance and is the source of cash flowing into markets. Whereas the narrative has been dominated by the central bank’s interest rate hikes (monetary), things have shifted to tax and spending (fiscal), dumbfounding the Macro bears incessantly calling for the top.
- Yellen’s visit to China is key to watch.
- Bitcoin consolidation off of record highs looks to be complete.
Crypto Native News:
- Deribit wins VASP license in Dubai
- Hut 8, one of the largest Bitcoin mining operations in the world, says banks want to buy its Bitcoin,
- Tether buys more bitcoin
- Ripple announces plans to launch a stablecoin.
- Trading volumes in spot, futures, and options all rise.
Institutional News:
- Singapore announces plans to expand the scope of regulated payment services
- European hedge fund Brevan Howard invests in a crypto accelerator fund
- Monochrome Asset Management transfers its bitcoin ETF to CBOE Australia.
Market Overview
This week we’re taking a closer look at momentum strength and duration. On the left-hand side, we have three charts: bitcoin, ethereum, and altcoins. When the black line rises above the red or below the green line, these are indications that the momentum in the market has become overextended.
At present, we’ve entered a sweet spot, with a potential bullish run starting to emerge.
*h/t to X user Pedma for the inspiration on this momentum cycle.
Fear and Greed Index
- Current Reading: Optimism observed in the market.
High Time Frame (HTF) Analysis
- BTC Season: A strong resilience and potential for growth were observed. A call to increase exposure towards BTC.
- ETH & ALT: Medium activity. ETH shows signs of bottoming out, suggesting a potential turnaround.
Low Time Frame (LTF) Analysis
- BTC: Shows signs of strength compared to ETH and ALTs, further cementing our strategy to lean heavily on BTC.
- ETH & ALT: Status indicates a lower performance, with ETH potentially nearing a reversal phase.
Market Momentum
Over the weekend things were looking bearish, but on Monday things flipped, and we’re now starting a new bullish momentum phase.
Whale vs. Retail Insights
- BTC: Decreased exposure from smart money.
- ETH & ALT: High exposure from smart money, indicating a belief in the assets’ resilience and potential for recovery.
Funding Rate Insights
Neutral-bullish funding rates have been detected in the overall market, suggesting a new potential bullish environment.
BTC Analysis
The BTC/USDT market has been trading within a broadening ascending wedge pattern on the higher timeframes (4H to Daily), suggesting a potential bullish continuation after the recent consolidation phase.
Despite facing selling pressure around the $72,000 resistance level, the price has been making a series of higher lows and higher highs, gradually moving upwards within the wedge structure.
Key Support Levels:
- $68,600: This area around the equilibrium level has provided support during the recent upswing.
- $67,000: The lower trendline of the ascending wedge pattern is acting as a crucial support zone.
- $65,000 and $60,000: These psychological and formidable support levels must hold to maintain the overall bullish structure.
Key Resistance Levels:
- $72,000: A formidable resistance area around the upper wedge trendline has seen increased selling pressure.
- $75,000: Another major resistance with reported substantial sell orders from Coinbase at this level.
The region around $72,000 has become a significant distribution area, with spot sellers aggressively offloading positions. However, market models based on leverage data suggest potential bullish reversal patterns emerging.
A decisive breakout above $72,000, followed by a successful breach of $75,000, could reignite strong bullish momentum and pave the way for a continuation of the uptrend towards higher targets.
Short-term Insights:
Our mean reversion model, based on the open interest and leverage of the market participants, flashed out a new bearish signal today. The previous signals worked pretty well, so we can use it as a warning signal.
A recovery and break above $70,000 could negate the short-term bearish signals.
Overall, while facing resistance around $72,000, the market appears to be in a bullish continuation pattern after consolidation.
Key levels to watch are $71,000-$70,000 to maintain bullish momentum, with $68,000 and $65,000 as critical support zones.
Portfolio Optimization Strategy
Given the insights from market data, we’re adjusting our portfolio strategy to align with current and predicted market phases:
- Trend Following: 40% Allocation-
- Momentum: 30% Allocation
- Breakout: 20% Allocation
- Mean Reversion: 10% Allocation
While markets are in a state of flux, moving quickly from bearish to bullish, our strategy leans towards exploiting the strength in BTC and gearing up for potential reversals in ETH and ALT sectors. A balanced diversification allows us to capitalize on immediate trends, while also preparing for future market shifts.
## TLDR
- Increase BTC Exposure: Based on current market trends, we’re leaning heavily into BTC.
- Prepare for ETH & ALT Reversals: With signs of bottoming out, we’re positioning to capture potential rebounds.
- Adapt to Bearish Momentum: Our strategy diversifies to mitigate risks whilst aiming for growth opportunities in challenging market conditions.
- Stay Cautious but Opportunistic: While optimism exists, the market also hints at necessary caution.
Let’s continue to steer through these exciting yet challenging times with keen insight and a well-devised strategy. Your dedication to being an ‘Aqtivator’ is what drives the future of AQTIS. Together, let’s capture the opportunities that lie ahead.
Warm regards,
The Quantor
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