Biweekly Market Report (2020/03/02 ~ 2020/03/15)

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BTC/USD (BitMEX)

8,490 (03/02) → 9,158.5 (03/06) → 8,038.5 (03/08) → 3,596.5 (03/13) → 5,338 (03/15) is a summary of the price movements of Bitcoin futures (BitMEX) for the past two weeks.

All price data were collected on 03/16 12:00

Due to the impact of the coronavirus, the market supply chain and demand have fallen sharply. In addition, the break in oil price negotiations has severely damaged energy companies, and global valuable assets have crashed.

The deleveraging effect, coupled with the substantial decline in traditional holding assets (stocks, bonds), has made major hedge funds adjust their positions. This in turn tightened cash flow and created urgent needs to exit. Cryptocurrencies’ volatility has naturally become the first to be abandoned, marking the largest drop in the history of the crypto market. The bloodbath fell by more than 50% on 03/13, and all investors were told that the bear market may be looming.

Figure 1: BTC/USD (BitMEX) Recent trends (hourly line). Source: AIcoin.

ETH/USD (BitMEX)

232 (03/02) → 245.85 (03/06) → 199.85 (03/08) → 85.9 (03/13) → 112.75 (03/15) is a summary of the price movements of Ethereum futures (BitMEX) for the past two weeks.

All price data were collected on 03/16 12:00

The decline of ETH is even more violent than that of BTC. It fell by as much as 62% since this article was written. The root cause was that the bull market of ETH’s crazy spike in early February was not solid enough. Speculative players all appeared to be cleared out at the same time, causing the big collapse.

The DeFi leader MakerDAO also suffered a systematic loss of more than four million US dollars due to the abnormal settlement mechanism. This was more than enough to wake up sleepy DeFi investors who dream of DeFi’s steady growth.

Figure 2: ETH/USDT (Binance) Recent trends (daily line). Source: AIcoin.

Binance mainstream crypto trend analysis

It can be seen from Table 1 that the mainstream currencies in the past two weeks have shown a sharp decline, and their cumulative returns have exceeded -30%. BNB has suffered particularly severely, almost approaching a price cut in half.

Mainstream currencies in the past two weeks have fallen sharply after reaching a peak at about 03/07, and then two severe drops on 03/09 and 03/12. The declines have caused extreme panic among investors in the crypto market, and also caused many exchanges to go out of control. On 03/13, the decline has reached -50% and only then did the prices start to stabilize and rise slightly.

The cumulative rate of return (in USDT) for these cryptocurrencies in the last two weeks is as follows:

Table 1: Cumulative rate of return for each cryptocurrency based on USDT

Figure 3: Cumulative rate of return for each cryptocurrency based on USDT

Market Outlook

Last week, the crypto market experienced a very serious slump, which caused the volatility to rise sharply, which typically also clusters. Therefore, it is currently inferred that prices will fluctuate greatly. We recommend reducing the use of funds in order to cut losses that may increase in the wrong direction, maintaining a normal floating amount of account equity, and increasing the capital utilization rate when the direction is clear.

Bincentive’s Selected Strategies

The strategy that has performed the most brilliantly recently is “Cerberus Long-Short”. This strategy has caught almost the entire trend in the recent trend of BTC decline. From the price of BTC near $8000, it has followed shorting to $4,000 and made a profit of more than 50% this month. It has also not encountered much loss in the past few months. However, the main reason for such a high return in this wave of decline is the high utilization of funds, which means that the fluctuation of equity is relatively large. This is the biggest source of risk for this strategy. If investors are willing to bear its risk, this strategy is a prime choice.