Biweekly Market Report (2020/02/17 ~ 2020/03/01)
9,700 → 10,300 → 8,400 → micro consolidation is a summary of the price movements of Bitcoin futures (BitMEX) for the past two weeks.
All price data were collected on 03/02 12:00
Can crypto escape the coronavirus panic?
In addition to a short increase of 5% on 02/18 over the past two weeks, the crypto market faced a lot of downward adjustments and pressure. The current performance looks very weak. Not only did Bitcoin drop a thousand points on 03/02 to 8,400 (see Figure 1), altcoin prices were also heavily affected.
Other than the fact that Bitfinex repaid Tether with $100 million USD and the events that Bitfinex and OKEx were hit by DDoS attacks, which both caused major downturns, what else could have caused the declining market sentiment?
The coronavirus epidemic continues to be severe, and the global Dow Jones Industrial Index has not only repeatedly broken new lows, but also recorded a 12% drop in a week, marking the worst performance in the past 12 years. What is worth noting is that usually such a sharp decline in the stock price index will cause gold, Bitcoin, and other assets to rise sharply. This time however, not only did Bitcoin not rise but fell, gold also plummeted by 75 dollars on 02/28 (maximum daily decline in 7 years).
What does this mean?
The stock index, gold, and crypto market all had substantial cash outflows. Given most institutional investors expect that the volatility of various assets will soon increase, the overall holding ratio of all assets have been reduced. The significant reduction in leverage to reduce equity can also be seen from the net outflow of S&P funds, gold ETF funds, and the decline in open positions of BitMEX Bitcoin futures.
What actions can investors take at this time?
The proportion of holding a single asset should be reduced and moved towards multiple allocations. In addition to investing in cryptocurrencies, precious metals or bonds are also good choices.
Binance mainstream crypto trend analysis
It can be seen from Table 1 that in the past two weeks, the prices of all cryptocurrencies have broken downwards, and those that have fallen the most are XRP, LTC, and EOS. In particular, XRP has fallen by 16.3% in one go, and ETH, which performed relatively strongly some time ago, fell only about 10% in the context of the overall poor market performance.
The cumulative rate of return (in USDT) for these cryptocurrencies in the last two weeks is as follows:
Market Outlook
Is the current downtrend coming to an end? Maybe not yet. The number of confirmed coronavirus diagnoses does not seem to be easing. Under this circumstance, the US stocks may underperform. On the crypto side, investors are waiting for the right moment for action. Blindly buying into futures at this time would be risky, perhaps a more suitable choice would be going for quantitative investments.
Bincentive’s Selected Strategies
Bincentive believes that using more diversified investment portfolios such as F4 will be more suitable for the current environment. F4 happened to only lose 0.1% during the consolidation period in February. Compared with other strategies, F4 has a smoother equity curve, and its astonishing fluctuations reflective of last summer’s can also bring explosive profits.
This article expresses an independent view of Bincentive. Bincentive is not responsible for investment profits and losses, and investors should carefully consider various investment risks.
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