Choosing a strategy is the first step in your trading journey. But it doesn’t end there. Regularly checking in on your bots’ performances and having a global understanding of the market is equally important. To make this easier, we share regular performance analyses for our strategies. This article will cover Wise: BTC from April 11 2022 to July 11 2022.
Going Long on Bitcoin With Wise: BTC
Wise: BTC is a trend-following strategy, trading on bitcoin (BTC). The bot monitors the market and generates a signal based on moving averages and slope indicators for specific time frames. Depending on this signal, the bot can either go long (buy) if it identifies a rise in value, or go neutral if BTC’s price seems to be falling. The objective of the strategy is to capture positive trends on BTC, and only participate in market upsides.
Wise: BTC combines 3 strategies. Two-medium term strategies (weekly and daily) trigger a buy signal when BTC’s price is above the trend indicator. The short-term strategy follows a contrarian tactic. It buys the crypto when its price is oversold, i.e when BTC is trading at lower price levels.
What’s Happened in the Market?
The last three months have been tough on crypto, both because of macro-economical issues and crypto-specific problems. On the macro level, the acceleration of inflation and spikes in long-term yields have negatively impacted all trading markets. On the crypto side, after the Luna ecosystem and its associated token crashed, Celsius, a major crypto lender, announced it was defaulting. This led to an increasingly risk-averse environment for crypto.
How Did Wise: BTC Perform?
When it comes to BTC prices, there have been two main shocks in the last three months. From May 6 to May 9, following Luna’s crash, BTC saw its value fall from $40,000 to $30,000. On June 10-13, Celsius’s liquidity crisis led to another drop, from $30,000 to $20,000.
Wise: BTC is a strategy that performs best in clear bullish trends, when prices are rising. This has not happened in the past three months. On the contrary, the market was falling and very volatile, making for a lot of false signals.
However, Wise: BTC has been very reactive and neutralized its exposure before both crashes, on April 22 and June 10. This explains that, while Wise: BTC’s performance is negative over the period (-6.96%) it still outperforms BTC (-47.23%).
In a difficult market, Wise: BTC remained defensive and curtailed its losses. Its objective is now to be as reactive to catch the rebound as it was to avoid the downturn.
Investing involves risk, including the possible loss of all the money you invest. In particular, crypto-assets are a highly volatile and speculative asset class. Napbots is only suitable for traders who are willing to bear the risk of loss and experience sharp drawdowns. Past performance is not necessarily a guide to future performance.
The purpose of this material is to provide objective, educational and interesting commentary and analysis on developments in the crypto-assets sector. Nothing in this material should be interpreted as constituting an offer of (or any solicitation in connection with) any investment products or services by any member of the CoinShares Group where it may be illegal to do so. Access to any investment products or services of the CoinShares Group is in all cases subject to the applicable laws and regulations relating thereto.