”Macro-scale quantitative market analysis”
T Quantitati In `tor FEBRUARY 27, 2021
VOL.I. . . No.48
BC ANALYTICS, LLC
Risk
Abstract By BENJAMIN J. COWEN, PHD
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BTC Price ($)
You have jumped into the cryptoverse! Welcome to the 48th edition of The Quantitative Investor, a weekly newsletter for those who want to dive deep into the metrics of various financial markets, with a focus on cryptocurrencies, and visualize data not often presented elsewhere. The main objectives of this newsletter are to graph key metrics, identify any trends or correlations, and present the data which will help the reader understand long-term price movements. This report is strictly not financial advice and should not be treated as such. Instead, it is focused on analyzing historical data, presenting the data in a manner which is informative, and making a few projections based on mathematics alone. The reader is still expected to do their own research when it comes to investing, especially within the cryptocurrency asset class.
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Strategies for the Coming Weeks
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Figure 1: Bitcoin price vs. time with a color-coded risk dimension.
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BTC Price ($)
Considering how extended crypto is right now, I think we need a video just discussing strategies for the next few weeks. As I publish this report/video, the market is experiencing a pullback, but we also know how resilient it can be, and how quickly the sentiment can change. This week’s report is fairly 1 105 Price limited, as I mainly just want people to watch the weekly video 0.9 Risk where I discuss my strategy over the next several weeks. 104 0.8 This strategy includes where I would take profits if we 3 10 0.7 continue moving up, or where I may re-enter with fresh capital if things start to drop. Despite the drop right now, the entire 0.6 102 asset class is still relatively far extended. The most promising 0.5 position I may add fresh capital to soon is ETH if it falls below 101 0.5 risk. I also discuss how far other cryptocurrencies could 0.4 theoretically extend based on the risk levels, if history is any 0.3 100 indication. Remember that this market cycle will likely be a 0.2 long one, and there will be substantial corrections along the 10-1 way. Do not lose sight of the end goal though, and that would 0.1 generally be a total market capitalization of approximately $10T, 0 10-2 2010 2012 2014 2016 2018 2020 plus or minus a few trillion. This journey will likely take several years and will not all happen in 2021. I am simply trying to not let any intermediate bubbles go to waste. I’ll defer the rest of Figure 2: Bitcoin price (primary y-axis) and risk (secondary y-axis) vs. time. my thoughts to the weekly video!