The last Past four weeks the Akt.io expert realized 4 successive rotations in the portfolio allocation (Rebalancing) in order to optimize the portfolio return and maintaining the risk as the lower as possible.
In the light of the recent technical price action within the thematic our expert team detect key reversal technical elements coming from the most known tokens in the ‘’borrow & lending’’ protocol – DeFi & the payment coins. It was the case with COMP, AAVE, MKR,SNX or LTC, BCH for example which start to accumulate an unusual significant trading volume which traduce a regain in the tension of liquidity in the protocol a head of significant institutional firm move with the ETF golden rush in progress leads by black rock and other investment firm
Following this signal coming from DeFi coin category further price action signal confirming the beginning of a recovery set up in the global crypto ecosystem follow with the major Layer 2 token participating to the extension of the Ethereum ecosystem and in extension to the multi-chain token especially right after the news around XRP the last past week.
In this context and regarding the macro and crypto market elements detailed below the expert decision has been to raise the risk exposure as previously set in March and April this year in order to record a significant gain for the next quarters by lowering allocation into the main driver such as BTC and ETH with only 6% allocated to the driver while DeFi thematic represent 38% of the weight of the DCP
We expect to obtain a larger outperformance than BTC or ETH by this allocation decision.
Diversified Crypto Portfolio: allocation & performance review
Actual CryptoBot Strategy – DCP Allocation and Weight (last rebalancing 17/07/2023)
Historical Algorithmic Performance review (Auto-Pilot):
The performance includes different version of the DCP with launch of the version 1.0 (simple diversification & no rebalancing) and 2.0 (Algo trading & rebalancing) in March and May 2023
DCP (Version 3.0 July 2023): Risk management upgrade with core-satellite integration (Capital protection by risk profile)
Year To Date
Diversification Review: Actual Portfolio correlation Matrice
By Token (asset)
The global correlation between each token or each thematic included in the DCP is positive with a minimum > or = 0,5.
Every asset of the DCP is evolving within the same underlaying trend, however their relative performance varies.
Only AKTIO token shows a correlation close to 0 with the larger capitalization Token which is highlighting the current lower adoption
The diversification rebalancing strategy is conservative with more funds allocated to Drivers and USDT if the market is evolving with range or bearish set up. However, in a bullish setup, funds are allocated towards the riskier thematic such as Sustainable network, DeFi, AI, Network Bridge, Metaverse
Year To Date
Key allocation decision elements:
Macro economy key elements
● Major economies are all experiencing disinflation as prices increase at a slower pace.
● US CPI came out at 3% which is 1% away from the Fed target of 2%.
● Several policymakers are saying that tightening is coming to an end and there is only one more rate hike priced in for this cycle which will come in July.
● US Rate cuts are being priced in as early as January 2024 raising interest for risk asset allocation in portfolio such as Tech Stocks or Cryptos.
Major economies are all experiencing disinflation as prices increase at a slower pace.
|The US is very close to reaching the target in terms of CPI with the Euro Zone not far behind.
Traders are anticipating a faster Rate cut in the US than other Major Economies leading towards a further robust US-Dollar Weakness
|The Euro is not far behind at 7.66% and with more rate hikes expected for the EU, this will strengthen the Euro even more
US Rate Market in pause: US Government Bonds 10YR Yield in trading range consolidation
|The US Gov 10 Year Yield ratio is calling for –17% consolidation phase with a faster pace Rate cut perspective waking up the appetite for risker asset class such as Stocks and Index.
US Stocks Market: Nasdaq 100 Index towards a new ‘’V’’ Recovery
The Nasdaq 100 Index is calling for +11% to +21% ascending phase with a faster pace Rate cut perspective waking up the appetite for risker asset class.
Crypto Market key elements
● Institutional investment firm such as Black Rock & Coinbase are raising appetite for Bitcoin exposure; The U.S. Securities and Exchange Commission (SEC) has launched its review of the latest bitcoin exchange-traded-fund (ETF) applications.
● XRP hit a 19-month high on the back of the ruling against the SEC. We can expect positive sentiment in the near term for the entire industry
● Crypto Drivers (BTC, ETH, CMC200 INDEX) are progressing within a recovery bullish trend.
● ETH/BTC ratio about to confirm a clear ETH outperformance, this will provide an ‘’Alt Coins’’ outperformance dominance for the coming weeks (upside break anticipation)
XRP hit a 19-month high on the back of the ruling against the SEC
|After years of fighting this battle, its an incredible achievement to come out on top, a larger upside potential is still open with a perspective towards 1,12.
Crypto Drivers: CMC200 Index (With BTC left chart – Without BTC right chart)
The crypto market (larger market cap) is progressing in a recovery trend keeping between 13% to 57% upside potential in the mid-term.
Crypto Drivers: ETH/BTC stuck in descending flag consolidation pattern – a bullish exit is more likely with a potential of +17% ETH outperformance
ETH outperformance is leading the global Alts coin thematic outperformance – This data allows the akt.io expert to raise the exposure on the riskier token and reduce the exposure on BTC and ETH in order to raise the return on the DCP.
Conclusion: Full Risk Gas for Diversified crypto portfolio (DCP)
From Macro to Crypto market perspective the recent elements are adding more credit for a raise of the risk appetite abroad drive by the price deflation in progress and global risk asset price consolidation phase about to pivot towards a new risk accumulation phase pushing Stocks Index and crypto market higher.
To conclude, ahead of a FED rate cut pivot expecting for early 2024 combine to the BTC Halving expected for Q2 2024 the crypto market seems to engage the long-term bullish run expected with at least +13 to 57% as upside potential for the next quarters. We will continue to follow the technical price element of the major coins in order confirm the bullish reversal in progress.