April 2, 2024
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,
As we navigate through the volatile corridors of the crypto universe, our guiding star is the meticulous analysis of market dynamics and trends.
Real World Asset Tokens (RWA) have become the top-performing narrative of the month. That’s thanks to Ondo Finance’s move to BlackRock’s Tokenized fund and the finance giant’s accumulation of other tokens. Here’s what else has happened in crypto this week:
- Vitalik Buterin issues a call-to-action for Ethereum developers — In a blog post last week, Buterin, one of the co-founders of Ethereum stressed the need for more developers to help deal with the network’s increasing popularity to prevent price spikes.
- BASE sets record DEX volumes — The layer 2 network developed by Coinbase has just passed $1 billion in trading volume in a single 24-hour period, a new record, surpassing its previous high by 25%.
- Bitcoin realized volatility surpasses Ethereum — as Bitcoin heads toward the halving this month, volatility has crept up to its highest level in more than a year. It’s now more volatile than Ethereum when using the 30-day historical realized volatility measure.
- Kucoin sees significant outflows — The Department of Justice accused the exchange and its founders of breaching the Bank Secrecy Act, leading to $1.7 billion worth of assets being withdrawn.
Market Overview
The crypto market has presented a mixed bag of signals, challenging even for seasoned traders. Here’s a breakdown of the current landscape:
A nuanced reading reveals that Altcoins are hinting at the culmination of their rally. A prudent approach would be to dial back on ETH and ALT long positions or hedge efficiently. Alts and ETH are losing strength in the LTF chart, potentially entering the consolidation region based on data.
The BTC trend stands out, affirming the potential for BTC-centric strategies.
Momentum Phases
The market is nestled in a bearish momentum, yet not to the degree of triggering alarms for an overextended trend. The practical play here centers around trend-following strategies, especially for BTC, given its robust LTF performance.
Whales vs. Retail Dynamics
A shift is palpable with BTC whales reducing exposure, contrasting sharply with the ETH and ALT sectors where smart money remains highly engaged. These insights underscore the importance of vigilance and selective investment choices based on underlying investor behavior.
Funding Rates
An elevated funding rate currently encapsulates the market sentiment, pointing towards a possible peak. This indicator warrants a cautious approach.
BTC Analysis
The BTC/USDT market moved sideways with vigor this week, trading within a broad range between $60,000 and $70,000. Despite the initial bullish momentum that pushed prices above $68,000, the market faced selling pressure around the $72,000 resistance level, resulting in a pullback.
Key Support Levels:
- $65,000: This level has acted as a significant support zone, with buyers stepping in to defend this price point.
- $60,000: A psychological and crucial support level that must hold to maintain the overall bullish structure.
Key Resistance Levels:
- $72,000: A formidable resistance area where selling pressure has intensified, leading to the recent pullback.
- $75,000: Another major resistance level, with reports of a substantial sell wall from Coinbase at this price point, adding to the selling pressure.
The region around $72,000 has become a significant distribution area, with sellers aggressively offloading their positions, potentially indicating a temporary top or a consolidation phase.
It’s worth noting that market models based on leverage data are indicating potential reversal patterns, suggesting a bullish sentiment shift may be on the horizon.
Moving forward, the market’s ability to hold above the $60,000 support level will be crucial for maintaining the overall bullish trajectory. A decisive break below this level could trigger further sell-offs and a potential change in the market’s direction.
On the upside, a sustained break above the $72,000 resistance, coupled with a successful breach of the $75,000 level, could reignite the bullish momentum and pave the way for a continuation of the uptrend.
As always, it’s essential to monitor key support and resistance levels, as well as market conditions and news, to make informed trading decisions and manage risk effectively.
Portfolio Optimization Strategy
Drawing from our analysis, the optimal reallocation for our portfolio to navigate through the current market landscape is as follows:
- Trend Following 40%
- Momentum 30%
- Breakout: 20%
- Mean Reversion: 10%
This allocation tactically responds to the bearish momentum, prioritizing trend following, especially in BTC, to capitalize on its current strength. We maintain a strategic spread across momentum and breakout strategies to position ourselves advantageously for potential shifts.
Looking Ahead
As the crypto terrain evolves, stay equipped with the insights and strategies that align with market dynamics. Remember, vigilance and adaptability are your best allies in the quest for growth and stability in your portfolio.
TLDR;
- The market is manifesting mixed signals, with Altcoins showing signs of peaking and BTC emerging as the focal point.
- The bearish momentum calls for a strategy emphasizing trend following, particularly in BTC.
- Accordingly, allocations have been adjusted to favor trend following (40%), with significant positions in momentum (30%) and breakout (20%), and leaving space for mean reversion (10%).
As always, we’re here to navigate these shifts together.
Stay investing,
The Quantor @ AQTIS
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!
