7,081 (12/16) → 6,410 (12/18) → 7,485 (12/19) → 7,225 (12/23) → 7,697 (12/24) → 7,222 (12/25) → 7,378 (12/29) is a summary of the price movements of Bitcoin futures (BitMEX) for the past two weeks.

All price data were collected on 12/29 22:00.

BTC/USD (BitMEX)

Following the bear market in November, Bitcoin price gradually entered consolidation in the past two weeks with an especially sharp period seen in Figure 1-A. Starting 12/16, Bitcoin price showed a slow downward trend. It dropped by about 600 points in total and uncleared open positions were maintained at relatively high levels. However, on 12/18, a sudden rise of 1,000 points occurred. The rise lasted for about 10 hours. Based on the increased amounts of closed positions and trade volumes, we can infer that many short positions had executed stop-losses (as shown in Figure 1-B). The price then fell back to levels near $7,100 to $7,200 and began a long period of consolidation (see Figure 1-C). On 12/23, attempts to pull the price back to $7,697 were made, but the multilateral trend did not last for a long time as the price recoiled to around $7,100 to $7,200 (as shown in Figure 1-D), and then began to consolidate for a long time until 12/29 (as shown in Figure 1-E).

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

Binance mainstream crypto trend analysis

It can be seen from Table 1 that all major currencies have not experienced significant price changes in one direction in the past two weeks. All mainstream currencies showed a slow drop and then a sharp rise between 12/16 and 12/20, followed by a consolidation trend from 12/20 to 12/29. BTC was the only one that did not fall by more than 10% between 12/16 and 12/20, while all other mainstream currencies saw declines of more than 10%. After 12/28 however, while BTC was still consolidating, all other mainstream currencies have had significant increases in price.

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 2: Cumulative rate of return for each cryptocurrency based on USDT

Market Outlook

From market trends in the past week (as shown in Figure 1-E), it can be seen that while current prices have been stuck, the amount of open positions continued to rise, which means that more and more funds have entered the market. Holding long or short positions does not matter in the eminent future. Fluctuations will intensify and volatility will therefore increase. It is recommended that investors be more cautious about recent price changes and avoid staying in the wrong direction that would possibly lead to incurring excessive losses.

Bincentive’s Selected Strategies

The price volatility in the past two weeks has had a wide range of variability. In the first week, a wave of slow declines and rapid rises occurred, causing the price volatility to be relatively large. In the following week, almost all of them showed consolidation, thereby shrinking volatility. Given that the downward and upward trends did not last long, the trend tracking strategies on the platform did not capture as much profit. With several consecutive lower rises and falls during consolidation last week, most strategies suffered a slight loss, but one strategy outshined the others — “Momentum_Continuity”. This strategy has surprisingly incurred no losses while netting only profits, a difficult feat achieved especially with trend following techniques in the market at the time.

Understanding strategy subscriptions

A trend-following strategy is a type of CTA strategy. When the price changes in a certain direction in the market, the trend-following strategy will do the same direction to track the current trend, and each trend-following strategy defines the different market direction. While performances may differ, the logical direction is the same. This type of strategy is often used in markets with great market momentum and strong continuity of certain wavelengths. As long as a large price change is caught, a large profit can be obtained. But when the market’s volatility shrinks into a consolidation period, this type of strategy often faces losses.